Selling to America Yen PriceExc Rate$ CostChange Start of scenario100,000110 $909.09 Dollar strengths100,000115 $869.57-4.35% Dollar weakens100,000105.

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Presentation transcript:

Selling to America Yen PriceExc Rate$ CostChange Start of scenario100, $ Dollar strengths100, $ % Dollar weakens100, $ % Selling to Japan $ PriceExc RateYen PriceChange Start of scenario$1, ,000 Dollar strengthens$1, , % Dollar weakens$1, , % As the dollar strengthens, things from Japan become cheaper, but Japan pays more for U.S. products. As the dollar weakens, things from Japan become dearer, but Japan pays less for U.S. products. (c) 2001 by Russell G. Todd

Interpreting Forex Figures USD/JPY; USD/CHF; USD/CAD Yen per dollar, Swiss franc per dollar, Canadian dollars per dollar High figure = strengthening U.S. dollar, weakening foreign currency Dollar strengthened to 95 yen from 94.5 yen. Dollar can buy more yen; yen can buy fewer dollars.

Interpreting Forex Figures EUR/USD; GBP/USD; AUD/USD; NZD/USD US$ per euro; US$ per pound; US$ per Aussie $; US$ per Kiwi $ Higher figure = weakening US dollar Dollar weakened from 1.44 pounds to 1.45 pounds. Pound can buy more dollars; dollar can buy fewer pounds.

“Cross Rates” Comparing currencies other than US$ EUR/JPY = yen per euro Higher figure = stronger euro, weaker yen Lower figure = weaker euro, stronger yen Pound strengthened to yen from yen a day earlier. Pound can buy more yen; yen can buy fewer pounds.

The Yuan USD/yuan = yuan per US dollar Higher figure = stronger dollar, weaker yuan Dollar weakened marginally to yuan from a day earlier Dollar can buy a little less yuan

The rule If USD is on the left side, higher number equals stronger dollar Means other currency per dollar If USD is on the right side, lower number equals stronger dollar Means dollars per other currency Why so confusing? Maybe so the pros have an edge?!