The law of demand in the foreign exchange market refers to the relationship between

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The law of demand states that as the price of a good increases, the quantity demanded decreases, and vice versa. In the foreign exchange market, the "good" being exchanged is currency. Therefore, the law of demand in this market refers to the inverse relationship between exchange rates and the quantity of U.S. dollars demanded. As exchange rates increase (i.e., the value of the dollar increases), the quantity of U.S. dollars demanded decreases, and vice versa.

The Law of Demand in the Foreign Exchange Market Refers