Question

In September 2012, the Federal Reserve announced a large-scale asset-purchase program (known as QE3) designed to lower intermediate and longer-term interest rates. What effect should this have had on the dollar/euro exchange rate?

Short answer

The impact of this arrangement on the conversion scale is appended in the table.

Step-by-step solution

Concept Introduction

On November $25,2008$, the Federal Reserve reported that it would buy up to $\$100$million of government-supported undertaking (GSE) obligation and up to $\$500$million in contract upheld protections (MBS) to decrease risk spreads on GSE obligation and moderate strife on the lookout for lodging credit.

Explanation 

On March $18,2009$, the Federal Open Market Committee (FOMC) public statement reported that the Federal Reserve would buy an extra $\$750$billion of office MBS, an extra $\$100$billion in office obligation, and $\$300$billion of longer-term Treasury protections. The motivation behind the new resource buy program, similar to all of the money-related approach activities taken by the FOMC since the beginning of the worldwide monetary emergency, is to satisfy our legislatively ordered targets of advancing the most extreme work and cost security.

Final Answer 

The impact of this arrangement on the conversion scale is appended in the table.

The USD in total declined by 3.54 to 7.76 percent relying upon the money.