The U.S. dollar is rallying against the euro.

Sites to Visit for More Information:

U.S. Department of Labor

European Central Bank

Resources for Economists on the Internet

Questions:

1. Why is the European Central Bank concerned about the euro’s “strength and volatility”?
2. What are the factors that lead to an appreciation of a currency?
3. Why are more foreign investors buying U.S.assets?
4. According to the article, the U.S. dollar did not rise against the Japanese yen. Explain the role played by the Bank of Japan in the Japanese yen appreciation.
5. What do you think is better for the European community—a stronger U.S. dollar or a stronger euro? Why?

Chapters: 34

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