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  •  Exchange rates, monetary policy

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Euro hit by bets ECB monetary policy will diverge from major peers

  • With reference to the chart, explain whether the euro appreciated or depreciated against the US dollar from Q1 — Q4 2021

  • Define hot money

  • Explain why speculators are likely to swap euro for sterling or USD

  • Using exchange rate diagrams, analyse the effect of these currency trades on the respective exchange rates

Gavin Clarke, Emmanuel College

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