Answer to Question #52987 in Macroeconomics for zefet

Question

Since September 2014 the euro has devalued 20% against the US dollar (from 1.3 to 1.05$/€), and then regained some value in April 2015 back to a peak of 1.15$/€. After that event, the euro has dropped again to 1.1$/€. What is the likely range of value of the EUR/USD in October 2015

Answer 1

If since September 2014 the euro has devalued 20% against the US dollar (from 1.3 to 1.05$/€), and then regained some value in April 2015 back to a peak of 1.15$/€. If after that event, the euro has dropped again to 1.1$/€, then the likely range of value of the EUR/USD in October 2015 is 1.1-1.15 $/€, because its value will be stabilized after the period of high volatility.