Part II

Determining the Exchange Rate

Learn a new approach in exchange rate determination in the article “The Microstructure Approach: New Details on Exchange Rates in the Short-Run“ at www.dummies.com/extras/internationalfinance.

In This Part . . .

I supply you with the framework of demand and supply. This easy-to-use model can help you predict the change in the exchange rate.

I break down the Monetary Approach to Balance of Payments (MBOP), another approach to predict the change in the exchange rate.

I show how to use the MBOP to make both short- and long-run predictions regarding the change in the exchange rate.