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3. Through the summer and fall of 2008, as the global financial crisis began to take hold, international financial institutions and sovereign wealth funds significantly increased their purchases of U.S.
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3. Through the summer and fall of 2008, as the global financial crisis began to take hold, international financial institutions and sovereign wealth funds significantly increased their purchases of U.S. Treasury securities as a safe haven investment. How should this have affected U.S. dollar exchange rates?

User John Sterling
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Answer:

The answer is: The US dollar exchange rate will appreciate relative to other currencies.

Step-by-step explanation:

The US dollar exchange rate is determined by its supply and demand, it is a free floating currency. If the demand for US Treasury securities increased, then the demand for US dollars increased also. Since the demand for US dollars increased, then its exchange rate will appreciate relative to other currencies.

User Krupal Panchal
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