Answer:
The expected future exchange rate decreases the demand for U.S. dollars. An increase in the U.S. demand for imports decreases the demand for U.S. dollars.
Explanation:
An exchange rate depends on how many units of one currency can be interchanged for one unit of a different one. In any country, it is possible that a higher exchange rate can weaken the balance of trade, whereas a lower exchange rate can enhance it. On the other hand, if a country has a higher need to import, the demand for its currency will fall.
