In the day-to-day foreign exchange market what type of market participant demands the German euro? ?

Question

What type of market participant supplies the German euro?

b. For few months, prior to your vacation trip to Germany, you find that the exchange rate for your U.S. dollar has decreased relative to the euro. If you were a U.S. citizen or resident, are you pleased??

Answer 1

THose companies who buy goods from German companies demand the Euro, because they need to pay for the erchandise in Euro. If you are going to travel to Germany, it is not good for you if the Euro appreciates versus the dollar, becasue things will be relatively more expensive. For exaple, if the exchange rate is initially 2 dollars to one euro, a one euro drink will cost you 2 dollars. However, if the rate changes to 3 dollars to one euro, meaning the dollar depreciates, the same one euro drink will now cost you more at 3 dollars.