Revised expected future exchange rate influences

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Reference no: EM13732341

Yesterday, the current exchange rate was $ 1.05 Canadian per U. S. dollar and traders expected the exchange rate to remain unchanged for the next month. Today, with new information, traders now expect the exchange rate next month to fall to $ 1 Canadian per U. S. dollar.

Explain how the revised expected future exchange rate influences the demand for U. S. dollars, or the supply of U. S. dollars, or both in the foreign exchange market.

Reference no: EM13732341

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