Discuss the reasons for the recent weakness of the US Dollar.

Please include anotated economic diagrams to support explanations.

Send in Microsoft Word format, with diagrams to be editable.

Books to use:

Richard.M.Levich, International, Financial Markets, Prices and Policies, Second Edition, McGraw-Hill Irwin, 2001. (RL)

C.Paul Hallwood and Ronald MacDonald, International Money and Finance, 3rd Edition, Blackwell, 2000. (H&M).

Cover the following topic:

-Foreign exchange markets
-Purchasing Power Parity
-Interest Rate Parity
-Foreign exchange market efficiency
-Balance of payments
-ISLM framework
-Floating/fixed exchange rates