1. Refer to the exchange rates given in the following table:

Today One Year Ago June 25, 2010 June 25, 2009 Country Per $ Per £ Per ¤ Per $

Australia 1.152 1.721 1.417 1.225 Canada 1.037 1.559 1.283 1.084 Denmark 6.036 9.045 7.443 5.238 Euro 0.811 1.215 1.000 0.703 Hong Kong 7.779 11.643 9.583 7.750 India 46.36 69.476 57.179 48.16 Japan 89.35 134.048 110.308 94.86 Mexico 12.697 18.993 15.631 13.22 Sweden 7.74 11.632 9.577 7.460 United Kingdom 0.667 1.000 0.822 0.609 United States 1.000 1.496 1.232 1.000 Source: U.S. Federal Reserve Board of Governors, H.10 release: Foreign Exchange Rates.

Based on the table provided, answer the following questions:

a. Compute the U.S. dollar-yen exchange rate E$/¥ and the U.S. dollar-Canadian dollar exchange rate E$/C$ on June 25, 2010, and June 25, 2009.

b. What happened to the value of the U.S.

dollar relative to the Japanese yen and Canadian dollar between June 25, 2009, and June 25, 2010? Compute the percentage change in the value of the U.S. dollar relative to each currency using the U.S. dollarforeign currency exchange rates you computed in (a).

c. Using the information in the table for June 25, 2010, compute the Danish krone-

Canadian dollar exchange rate Ekrone/C$.

d. Visit the website of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov/. Click on

“Economic Research and Data” and then

“Statistics: Releases and Historical Data.”

Download the H.10 release Foreign Exchange Rates (weekly data available). What has happened to the value of the U.S. dollar relative to the Canadian dollar, Japanese yen, and Danish krone since June 25, 2010?

e. Using the information from (d), what has happened to the value of the U.S. dollar relative to the British pound and the euro?
Note: The H.10 release quotes these exchange rates as U.S. dollars per unit of foreign currency in line with long-standing market conventions.