Foreign Exchange Rate

Therefore, during the period in question the U.S. dollar depreciated relative to the Japanese Yen by 26 percent. When a currency such as the U.S. dollar depreciates, the income generating potential or profitability on exports for exporters such as Campbell Soup Company goes up. When the dollar dropped against the Yen, it made U.S. goods and services 26 percent cheaper to the Japanese. So, in a sense, a weaker dollar is good for American exporters such as Campbell.

The exchange rate between the dollar and the Yen is determined by supply and demand meaning that it floats or adjusts to the demand for and supply of U.S. dollars versus Yen. When examining why the dollar depreciated against the Yen so dramatically, economic theory suggests there are four major factors that determine the exchange rate between two curren

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Approximate Word count = 1098
Approximate Pages = 4 (250 words per page)

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