We are thinking about "What is an example of a foreign currency in the world today, that can be exchanged for U.S. dollars? And describe at least one country where that currency is being used as money now".

In my classmate thinking,

In Japan, we use yen (Japan) as a currency which can be exchanged for US dollars. Yen is Japanese currency which was enacted in 1871. It is basically used in Japan and it was temporally used in Republic of Zimbabwe since 2014 to 2019. 1 USD is currently equal to 105.59 JPY, so if you buy something which costs 100 USD, it will cost 10559 JPY in Japan.

When I compare USD and JPY, I think about gasoline. In the US, the price of gasoline is about 2.8 dollars per gallon. Converted to a liter, it costs 0.7 dollar per liter. The average price of gasoline in Japan is 126 JPY per liter, so it is equal to 1.19 USD per liter. Even though the price depends on regions and seasons, gasoline in the US is much cheaper than it in Japan.

Question

My reply should also be at least two paragraphs long, and demonstrate my own understanding with a numerical example of how currency appreciation of the U.S. dollar (compared to the currency you are replying about) could be seen in the future in the Foreign Exchange Market

My answer

Various factors are intricately intertwined in the volatility of the U.S. dollar in the foreign exchange market. We need to compare country-by-country figures and look at other factors that affect the currency. I don't think there's anything as complicated as the movements of the dollar versus the yen over the past 30 years. There are various factors behind this, including fluctuations in interest rates, political stability, economic growth, fluctuations in inflation, trends in imports and exports, and changes in external debt conditions. For example, in fluctuating inflation rates, higher inflation rates make currencies weaker in the foreign exchange market. In 1990, inflation was 3.08 percent in Japan and 5.40 percent in the United States. By the end of the year, the dollar had fallen from 160 yen to 135 yen against the dollar.2000 inflation the exchange rate of the yen against the dollar has dropped to 107.8 yen, with -0.68 percent in Japan and 3.4 percent in the United States. Ten years later, in 2010, Japan's inflation rate rose to 0.72 percent, while the U.S. dropped to 1.64 percent. The dollar fell to 87.78 yen to the dollar. The current inflation rate is 0.23% in Japan, 0.62% in the United States, and 105.59 yen against the dollar.

Also, the gasoline example is very interesting. Gasoline is an essential part of our lives. For example, it is possible to manage to supply electricity, water, and food and drink necessary for living in Japan. But you can't get gasoline unless you import it from the Middle East. In other words, the yen's depreciation and soaring crude oil prices brought about by the booming economy and favorable markets will raise the consumer price index, but this will eventually lead to a decline and trigger recession and deflation. Therefore, if crude oil prices continue to rise or soar, it can be seen as a sign of "strong yen, weak stock prices, dollar depreciation, weak U.S. stock prices," and "stagnation or slowdown in the world economy. Therefore, all financial markets around the world move in a single cycle, repeatedly rising and falling while influencing each other.

I don't think my answer is right.I want you to find out what's wrong and fix it.