Foreign Exchange Markets
Completion requirements
Foreign exchange markets set the value of currencies against one another, influencing the price of products and services worldwide. If one country has a cheaper or undervalued currency, it can produce and sell products to the world at a lower price. Read this section to learn more.
Demanders and Suppliers of Currency in Foreign Exchange Markets
Answer to Try It Question
b. hedging.
Correct. US Giant is trying to protect itself from fluctuations in the value of the dollar relative to the pesos and preventing the price of the goods sold to Mexico to decrease because of changes in the value of the dollar versus the Pesos.