Exchange Rate Movements - 1376 Words

FIN340 304 Tutorial week 3 Questions 1. How can a central bank use direct intervention to change the value of a currency? Explain why a central bank may desire to smooth exchange rate movements of its currency.. 2. Should the governments of Asian countries allow their currencies to float freely? What would be the advantages of letting their currencies float freely? What would be the disadvantages? 3. What is the impact of a weak home currency on the home economy, other things being equal? What is the impact of a strong home currency on the home economy, other things being equal? 4. Assume the Hong Kong dollar (HK$) value is tied to the U.S. dollar and will remain tied to the U.S. dollar. Last month, a HK$ =†¦show more content†¦By minimizing the exchange rate uncertainty, foreign business of the home country is enhanced and can attract more funds as investments. Smoothening currency movements tends to reduce fears in the financial markets and speculative activity that might lead to heavy decline in va lue of the currency. However, speculation can only be expected to smooth exchange rate movements if underlying economic processes are relatively stable. If there is a great deal of uncertainty over future government actions and their economic impact, expectations will not be strongly held. Thus expectations can change dramatically from day- to-day, leading to rapidly fluctuating exchange rates. 2. The government of Asian country should not allow their currencies to float freely as it may leads to critical problems to the country. Free floating currency policy may trigger speculation on currency that can bring about financial crisis. For example, the financial crisis of Asia countries in 1997, the most famous speculator George Soros had benefited billions of money by going short of the Asian countries currency which result collapse of the country economy. Furthermore, we take China as another example. The growth rate of China GDP is 9.30% in 2011, the main force of the high growth GDP in China is export of good and services which mainly due to the low price or the low exchange rate of currency. Free floating currency will bring RMBShow MoreRelatedWhy Is It so Difficult to Forecast Exchange Rate Movements?1034 Words   |  5 Pagesstability. It is not difficult to see the exchange rate fluctuations are widely regarded as damaging. As the movements of the exchange rate have s ignificant and large effects on the trade balance, resource allocation, domestic prices, interest rate, national income and other key economic variables. Then can exchange rate movements be predicted by these fundamental economic variables? Economists have long taken the view that economic fundamentals determine exchange rates. Nevertheless, in the early 1970sRead MoreThe Link between Trade Performances and Exchange Rate Movements799 Words   |  3 PagesThe link between trade performances and exchange rate movements has been the matter of many practical studies. The literature review explains that the set of results, often in similar countries, might stem from practical proof being removed from diverse time periods and not the same methodologies. First, it clarifies whether exchange rate instability impedes trade flows. Second, it shows if the exchange rate depreciation develops the trade balance (J-curve effect). Wei (1999) evaluated a board ofRead MoreHow The Monetary Policies Affect The Exchange Rate Movement2097 Words   |  9 Pagesrelationships between the exchange rate and various economic fundamental variables. About econometric software, where it is used is Stata. 4.1 Aims and objectives Due to the Britain perform double tight fiscal and monetary policy is very firm. Control interest rate and stabilize the economy have played a certain impact on the sterling. For this project, the aim study is to find the answers for the main question, which is how the monetary policies affect the exchange rate movement. 4.2 Theoretical underpinningRead MoreThe Theory Of An Nominal Price Of The Existence Long Run Deviations From Ppp939 Words   |  4 PagesDue to the fact that short-term nominal price rigidities, the movements of nominal exchange rate result in movements of real exchanger rate in the short-run. Balassa- Samuelson model is the first and most popular model for rationalizing the existence long-run deviations from PPP, which depends upon the assumption that the equilibrium exchange rate is determined by the traded good prices. The underlying argument of this model is that, both developed countries (DC) and less developed countries (LDC)Read MoreExploring The Beliefs And Actions Of The Foreign Exchange ( Forex ) Market1728 Words   |  7 Pagespurpose This research was aim to discover the beliefs and actions of the trader in the foreign exchange (Forex) market, then adding to our knowledge about the microstructure of the Forex as well as trader’s view on exchange rate determination. Hence, it pointed out the divergence between economists’ and trader’s view. 1.2. Research method Authors used survey methodology with sample on UK-based foreign exchange dealers to collect analysis data. Specifically, 110 questionnaires were return from 1940 surveysRead MoreExchange Rate Between Countries Determines One Currency s Strength1305 Words   |  6 PagesLewis Hodge International Finance Euro/USD Exchange rate December 7, 2015 Exchange Rate The exchange rate between countries determines one currency’s strength in comparison to another. These rates also oversee the economic growth and the currency purchasing power of countries. Therefore, exchange rates are vital in ensuring that one country can maintain its value versus the US dollar which is the most dominant currency. Currently, the Euro/USD exchange rate is at 1.0666. This paper strives to giveRead MoreBusiness World and Exchange Rate Problems1656 Words   |  7 Pagesunderstand the problem of exchange rate. In order to answer to this problematic, various topics will be analysed. First, the concept of exchange rate will be defined to understand well the topic, then a summary of the movements of the four most used currencies, Dollar, Euro, GBP and Yen and theirs exchange rates over one year. In a second part, the main factors which play a huge role in the fluctuation will be explain and, more precisely, an explanation on the movement that appeared on the graph Read MoreInflation and Currency Risk644 Words   |  3 Pagesdecrease in value at some rate, and does so whether the money is invested or not. Malaysia is part of the worldwide emerging market where the country aims to achieve the status of a developed country by the year 2020, however, the increase in inflation and currency risk may effect that vision from happening. As inflation and currency plays a major role in the economic world. The performance of a stock market is usually associated with the movements in the exchange rate because of its influence onRead MoreThe Decline Of Australian Dollar Against The Us Dollar1231 Words   |  5 Pagescut its rate to 1.5% before March 2016 to deal with lower GDP and low domestic demand that is increasing unemployment. Mining investment has slowed down which reduced the value of iron ore causing Capital imports to fall in Australia. If the dollar declines too far then Australia’s import will be reduced and this is difficult for businesses. Another nail in the coffin for Australian economy is the plan to raise the rates of UK and US which could further decline the value of AUD. b) â€Å"Exchange rateRead MoreForeign Exchange Rate Sensitivity and Stock Price1702 Words   |  7 PagesFOREIGN EXCHANGE RATE SENSITIVITY AND STOCK PRICE : ESTIMATING ECONOMIC EXPOSURE OF TURKISH COMPANIES INTRODUCTION Variability in exchange rate is a major source of macroeconomic uncertainity affecting firms. After the 1970 s, the rapid expansion in international trade and adoption of floating exchange rate regimes by many countries led to increase exchange rate volatility. The firm s exposure to exchange rate risk increased. In the literature three types of exposure under floating exchange rate

Article Reviews My Weaknesses And My Strengths - 1123 Words

Jacquelin Garcia English 071 September 29, 2014 Dear Sarah, While writing the article reviews, I saw my weaknesses and my strengths. I found that Sometimes it’s difficult for me to get started with an idea, but when I’m going through the writing process it breaks it down of me so I’m able to keep up and revise even better. When the time came to revise my essay in class I noticed proofreading strategies. I was able to catch my own mistakes and found a lot of parts that didn’t even make sense. I never really like to read my papers even when we did the drafting in high school. However, I came to see during this project that reading my essays is like my best friend. I’m not very sure about my writing ability to pick up on certain words because I usually write like I talk. In the future I hope I fix this. I also found feedback from you very useful. I read it and I’m like yes she totally described my wring. I know that I had to change things but I couldn’t find my writing style. It was hard for me to incorporate the feedback because I didn’t know how to start. I’m sure I will get better but as of right now I found it difficult so I know that my writing may have not been that great A weakness in my writing was coming up with what to write about. While writing the reviews, I thought what I could incorporate, so I went to the writing center. This gave me a chance to see what my main focus would be. However, I didn’t find it like it helped a lot. My ideas were still all over theShow MoreRelatedArticle Critique Of Joshua Palkki1232 Words   |  5 PagesArticle Critique of Joshua Palkki (2015) American music teachers need to understand and meet the needs of their Latino/a students, and Palkki (2015) researches approaches that would aid music educators, specifically high school choir directors, in reaching and serving this population in his article â€Å"If it fits into their Culture, then they will have a Connection: experiences of two Latina students in a select high school choir.† Palkki (2015) presents a qualitative case study regarding two LatinaRead MoreThe Articles Of Confederation From A New Constitution1506 Words   |  7 Pagesdifferent actions taken to replace the Articles of Confederation to bring about a new Constitution. I will first start out by giving some background on the Article of Confederation as to what it was and why it was important for the US? 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Leading By Example Free Essays

How we relate to others is as varying as the stars In our solar system. For some, political leaders like Bark Obama and Sarah Plain display specific attributes on a dally basis. These characteristics are recognized globally as pillars of change and structure in today’s American society. We will write a custom essay sample on Leading By Example or any similar topic only for you Order Now Although not every decision these persons in power choose is supported by â€Å"the people†, it is easy to question where their particular morals come from. Reflecting on my own personal exposure to literature such as â€Å"To Kill a Mockingbird† by Harper Lee, I imagine examples such as Tactics Finch stood as a concrete Image for current world leaders to model their behaviors after. Like Tactics, today’s leaders face challenges maintaining personal Integrity, human decency toward others, courage, and respect both by and for one another. Those who have read the book may easily agree to the belief that Tactics truly was a great leader by utilizing these concepts in his daily life. His ability to connect to others on even the most challenging of levels shows the true courage needed to lead a community which is not truly united. It was during the cultural mixing of the sass’s hat Lee’s â€Å"To Kill a Mockingbird† shows the first acknowledgement of change for the country leadership. Although the character of Tactics exists wealth the pages of Lee’s creation, leaders like Tactics stand out as influential members of society, both in personal and civic relationships. While discussing the famous trial case of Tom Robinson Tactics explains to his daughter Scout the importance of valuing others’ opinions when they don’t align with your own. He says, â€Å"They’re certainly entitled to think that, and they’re entitled to full respect of their opinions. But before I can live tit other folks Eve got to live with myself. The one thing that doesn’t abide by majority rule Is a person’s conscience. † In attempts to also bring peace to an escalated situation President Obama shared words encouraging mutual respect. William Scott Harrow details the address given by Bark Obama focusing on Iran’s policy on mutual respect matters. â€Å"To denounce or shrug Off call for cooperation is an easy but also a cowardly thing to do. That’s how wars begin. That’s where human progress ends†¦ A sustained effort†¦ We need to find common ground, to focus on the true we seek for our children, and to respect the dignity of all human beings. † As I listen to friends share memories of ‘To Kill a Mockingbird†, a common word has been repeated by each of them, courage. Their eyes lit up with appreciation, thinking about the numerous times where Tactics demonstrated courage. Whether he was essentially forced to shoot a senile pet or fending off a crowd of angry townsmen he maintained a state of focus. It was during these times Tactics shared with his son the importance of taking a stand and having courage to lead others, even when they don’t all agree with you. He says totes, â€Å"A mob’s always made up of people, no matter what. Mr.. Cunningham was part of a mob last night, but he was still a man. † Instead of being angry with the dangerous group Tactics embraced compassion and faith, not fear. Keeping in mind that our economy harbors countless ideals of morality and human decency, I am reminded off quote Sarah Plain expressed during an Interview. â€Å"Faith that every baby Is created for a good purpose†¦ Plain was agree with the belief that all existing humanity deserves an enriched life, but the agree to how this point of view is mandated oftentimes sits uneasy with the majority of communities. Nonetheless Plain leads other groups in harmony, sharing one direction. Tactics Finch, during his time, was not among the many. His view of public decency wa s held higher than the general person. This did not allow him, however, to lessen his sense of retribution. He so greatly believed the actions taken for one man resulted in the good for humanity. This is why so many did have respect for him. Without negating the position of others Tactics respectfully managed a mom absent of a mother for his two children. Surrounded by women with means to raise Gem and Scout, Finch chose to take an active role as a mentor and father. This compassion earned the greatest respect of all, from Scout. And as any true leader does, succession brings action. â€Å"So I took an eight-year old child to bring ‘me to their senses, didn’t it? That proves something-that a gang of wild animals can be stopped, simply because they’re still human. Humph, maybe we need a police force of children†¦ Oh children last night made Walter Cunningham stand in my shoes for a minute. That was enough. † Acknowledging growth fosters the greatest forms of leadership. This story shows true life examples of how today we have the opportunity to create value from pain and injustice. Scout’s connection to reality through her relationships help demonstrate the effectiveness of Finchâ₠¬â„¢s role as a leader. Harper Lee described Scout’s experience through the sight of a child, although speaking with an educated dialect. The example led by Tactics Finch trickled down on a daily basis. How to cite Leading By Example, Papers