With exchange-rate changes of this magnitude, the risk is that currencies may move too fast and perhaps even too far.
These are unleveraged rates, which mean that with 10 times leverage, for example, net of any exchange rate changes, the interest income would be that much higher.
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Changes in the exchange rate also reduced the value of European payments made under the Common Agricultural Policy (CAP), he suggested.
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The Nikkei Currency Index series plots changes in the effective exchange rate against a base value of 100 for the value in 2005.
Supporters of the new government also say that it will try to make economic reform more palatable to Congress: whereas Mr Mahuad proposed the new exchange-rate regime as part of a package including telecoms and energy privatisation and changes in the labour laws, the new team may try to do things in stages.
The way to correct these imbalances is not through massive exchange-rate movements of the sort that might be under way, but by policy changes in both Japan and the United States.
Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.
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The chief advantage is that this outlaws any national discretion in the conduct of monetary policy: interest rates and the money supply adjust automatically to changes in economic circumstances, with the exchange rate totally fixed.
Exchange-rate changes will negatively impact some gold miners as their costs rise in foreign currencies in light of weaker U.S. dollar.
Since it takes time for exchange-rate changes to affect trade, the gap is likely to widen further: the full impact of the dollar's rise over the past two years has yet to be felt.
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