Changes to the United States law in 1995 also modified the manner in which the Commerce Department converts foreign currencies to United States dollars to calculate anti-dumping margins. The Commerce Department now uses daily exchange rates rather than quarterly rates. Using the daily rates, the Department calculates a weighted average exchange rate for the investigation period for use in converting foreign currencies to United States dollars.

The Commerce Department's rather anomalous way of using exchange rates in the anti-dumping calculation still exists under the new law, however. Essentially, the Commerce Department selects exchange rates based solely on the dates that the subject merchandise was sold in the United States market. It calculates a specific weighted average exchange rate for each United States model (CONNUM). Only the daily exchange rates for those particular dates on which there were United States sales (i.e. invoices) of the model are used in the calculation of the weighted average rate.

To illustrate with an example, assume that the investigation period is a calendar year. Further assume that, for a particular model, all of the foreign manufacturer's United States sales of colour televisions occurred in the last three months of the year - October, November and December. For that model, the Commerce Department will calculate a weighted average exchange rate using the daily exchange rates only for those days in October-December on which there were United States sales of the model. That weighted average exchange rate will be used to convert all sales prices and adjustments in foreign currencies, no matter when those sales and adjustments occurred. That is, for that model, the weighted average exchange rate (based on October—December United States sales) will be used to convert all home market prices (of the comparison model) to United States dollars even if all the home market sales occurred in February. This approach can have dramatic effects when the exchange rate fluctuates significantly.

Source: Business Guide to Trade Remedies in the United States: Anti-dumping, countervailing and safeguards legislation practices and procedures