Directions：
In the following text，some sentences have been removed．For Questions l-5，choose the most suitable one from the list A--G to fit into each of the numbered blanks．There are two extra choices，which do not fit in any of the blanks．
For Bill Gates Warren Buffett and many Wall Street number-crunchers，the dollar supplied one of the nastiest surprises of 2005．The world’s two richest men and most financial—market seers predicteC that the greenback would fall last year，dragged down by America’s colossal current-account deficit．① Many forecasters were predicting that the euro would buy$1．40一odd by now and that a dollar would fetch less than￥100．
(1) ______．Against the euro and yen，the greenback did even better．It ended the year at$1．18 per eur0，up by l4％．Despite a wobble in December，the dollar made a similar advanc￡ against the yen．
Not surprisingly，the pundits are more cautious about 2006．Although most expect the greenback tc end this year weaker than it began it，the typical forecast is that any decline will be fairly modest and take place mainly in the latter part of 2006．
(2) ______．The Federal Reserve raised short—term interest rates eight times in 2005，t0 4．25％．Japan，in contrast，kept the liquidity taps open and interest rates at zer0，while the European Central Bank raised rates only once，in December，t0 2．25％．Relatively higher American interest rates brought foreign capital pouring into dollar assets and pushed the currency up．
(3) ______．But as America’s tightening campaign levels off and European or(maybe)Japanese rates rise，the dollar will weaken．The consensus，according to a recent compilation of forecasts by Reuters，suggests that the dollar could reach$1．25 per euro and￥108 by the end of the year．
Judged by the first few days of 2006，those forecasts may prove too sanguine．The dollar suffered its biggest two-day drop against the euro in two years，and hit a two-month low of$1．21 against the European currency on January 4th．
(4) ______．An interest—rate gap that was merely stable ought to imply a weaker dollar．According to economic theory，it is the widening of interest-rate differentials that temporarily strengthens the exchange rate．
(5) ______． Financial markets may also have become too obsessed with the influence of interest rates on currencies．Historically interest-rate differentials have been little more use than anything else at predicting short—term movements in exchange rates．
[A]By this logic，as long as America raises rates faster than others，the dollar will stay stron9．
[B]They were all wrong．Although America，s current—account deftcit headed towards$800 billion in 2005，the dollar rose．It was up by 3．5％against a broad trade—weighted basket of currencies．the first rise in four years．
[C]Over time，an international difference in interest rates is offset by a drop in the currency with the higher interest rate．
[D]China is yet another cause of uncertainty．Its eagerly awaited but ultimately minuscule exchange—rate shift in July 2005 was a boon for the dollar because it did not set in train a wider realignment of Asian currencies．
[E]That is because most analysts attribute the dollar’s recent strength to widening differences between American，European and Japanese interest rates．These gaps are expected to grow for a few more months before closing slightly later in the year．
[F]An alternative view is that the exporters，like others，were attracted by rising American interest rates．A recent study by the Bank for International Settlements，for instance，suggested that the currency composition of OPEC members’deposits has become more sensitive to interest-rate differentials．
[G]One reason is that investors are becoming jittery about how soon the interest—rate gap might stop growin9．The dollar swooned after the release this week of the minutes of the Fed’s December meetin9，which suggested that short-term interest rates might not need to go much higher．[600 words]
In the following text，some sentences have been removed．For Questions l-5，choose the most suitable one from the list A--G to fit into each of the numbered blanks．There are two extra choices，which do not fit in any of the blanks．
For Bill Gates Warren Buffett and many Wall Street number-crunchers，the dollar supplied one of the nastiest surprises of 2005．The world’s two richest men and most financial—market seers predicteC that the greenback would fall last year，dragged down by America’s colossal current-account deficit．① Many forecasters were predicting that the euro would buy$1．40一odd by now and that a dollar would fetch less than￥100．
(1) ______．Against the euro and yen，the greenback did even better．It ended the year at$1．18 per eur0，up by l4％．Despite a wobble in December，the dollar made a similar advanc￡ against the yen．
Not surprisingly，the pundits are more cautious about 2006．Although most expect the greenback tc end this year weaker than it began it，the typical forecast is that any decline will be fairly modest and take place mainly in the latter part of 2006．
(2) ______．The Federal Reserve raised short—term interest rates eight times in 2005，t0 4．25％．Japan，in contrast，kept the liquidity taps open and interest rates at zer0，while the European Central Bank raised rates only once，in December，t0 2．25％．Relatively higher American interest rates brought foreign capital pouring into dollar assets and pushed the currency up．
(3) ______．But as America’s tightening campaign levels off and European or(maybe)Japanese rates rise，the dollar will weaken．The consensus，according to a recent compilation of forecasts by Reuters，suggests that the dollar could reach$1．25 per euro and￥108 by the end of the year．
Judged by the first few days of 2006，those forecasts may prove too sanguine．The dollar suffered its biggest two-day drop against the euro in two years，and hit a two-month low of$1．21 against the European currency on January 4th．
(4) ______．An interest—rate gap that was merely stable ought to imply a weaker dollar．According to economic theory，it is the widening of interest-rate differentials that temporarily strengthens the exchange rate．
(5) ______． Financial markets may also have become too obsessed with the influence of interest rates on currencies．Historically interest-rate differentials have been little more use than anything else at predicting short—term movements in exchange rates．
[A]By this logic，as long as America raises rates faster than others，the dollar will stay stron9．
[B]They were all wrong．Although America，s current—account deftcit headed towards$800 billion in 2005，the dollar rose．It was up by 3．5％against a broad trade—weighted basket of currencies．the first rise in four years．
[C]Over time，an international difference in interest rates is offset by a drop in the currency with the higher interest rate．
[D]China is yet another cause of uncertainty．Its eagerly awaited but ultimately minuscule exchange—rate shift in July 2005 was a boon for the dollar because it did not set in train a wider realignment of Asian currencies．
[E]That is because most analysts attribute the dollar’s recent strength to widening differences between American，European and Japanese interest rates．These gaps are expected to grow for a few more months before closing slightly later in the year．
[F]An alternative view is that the exporters，like others，were attracted by rising American interest rates．A recent study by the Bank for International Settlements，for instance，suggested that the currency composition of OPEC members’deposits has become more sensitive to interest-rate differentials．
[G]One reason is that investors are becoming jittery about how soon the interest—rate gap might stop growin9．The dollar swooned after the release this week of the minutes of the Fed’s December meetin9，which suggested that short-term interest rates might not need to go much higher．[600 words]