What is Happening to the U.S. Dollar?
Last year the dollar depreciated by about 18 percent in value relative to the Swiss franc and Japanese yen, about 11 percent relative to the German mark, and about 10 percent relative to the British pound. It gained against some others, as for example, the Canadian dollar. Using an aggregate measure of the change in the exchange value of the dollar that takes into consideration the movement in the exchange rate in terms of currencies of our 15 major trading partners weighted by their relative importance, we find the dollar has depreciated by about 41/2 percent over the past year.
