Assume the foreign exchange rate for the euro was U.S. $1.00 = .70 euro last month. This month, the exchange rate is U.S. $1.00 = .72 euro. All things equal, the dollar value of European stocks

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an increase in the exchange rate (from .70 to .72 euro per U.S. dollar) means that the euro appreciated in value and the U.S. dollar weakened. Therefore, the dollar value of European stocks will decrease since it will take more dollars to buy the same amount of euro-denominated stocks.

Assume the Foreign Exchange Rate for the Euro Was U