The US Demand for Foreign Exchange Arises Because Its Citizens Want

Essay

The U.S. demand for foreign exchange arises because its citizens want to buy things whose prices are quoted in other currencies, such as Australian jewelry, vacations in Mexico, and bonds or stocks issued by Sony Corporation of Japan. Whenever U.S. citizens make these purchases, they first buy the foreign currencies and then make the purchases. If that is true then where does the supply of foreign exhange come from?