Application Reading the Wall Street Journal The Currency Trading Column

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Now that we have an understanding of how exchange rates are determined, we can use our analysis to understand discussions about developments in the foreign exchange market reported in the financial press.

Every day, the Wall Street Journal reports on developments in the foreign exchange market on the previous business day in its "Currency

Trading" column, an example of which is presented in the "Following the Financial News" box.

The column indicates that concerns about a possible war against Iraq and weak economic data have put downward pressure on the U.S. dollar. Our analysis of the foreign exchange market explains why these developments have led to a weak dollar.

Following the Financial News

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