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Good day Mr. Moffat.
May you assist me on this
dollar/pound=2
My questions are how does the exchange rate changes if say:
1. The dollar has strengtherned by 10% and instead
2. The pound has strengtherned by 10%.How does the rate changes if the currencies weakened instead of strengtherned.
Thank you.
If the current exchange rate is dollar/pound 2, then 2 dollars equals 1 pound.
If the dollar strengthens, then 2 dollars will buy 10% more pounds, so the rate will change to 2 dollars = 1.1 pounds, so the rate becomes 2/1.1 = 1.82 dollars equals 1 pound.
If the pound strengthens, then 1 pound buys 10% more dollars, to the rate becomes 2.2 dollars equals 1 pound.
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