Exchange Rate Changes, James Tompkins

This is the seventh lecture in the "International Finance" series in which I discuss basic or fundamental reasons why exchange rates change. The key is that everything is relative. So fundamentally, if the Germans want more U.S. goods and services than the U.S. wants of theirs, then there would be a relative greater demand for the dollar than the euro, and the dollar, all else being equal, would strengthen. So what are some of the relative factors between nations that impact their exchange rates? In addition, I discuss the impact of the value of the dollar on the price of oil. As always, I emphasize logically understanding the concepts as opposed to memorization.

[ganges_g]

Thanks so much for sharing the knowledge.

[vladvince]

I’m just joining in this lecture. I’m a little confused as to what’s being asked here 2:47. The surplus in the deficit. Could this mean that there is more of a deficit or more of the money than they spent in total? I’m going to go with the later