Topic: Cross rates of Chinese Renminbi and Swiss Franc against the Euro
You are tasked with preparing a brief report showing application of cross rates for the Chinese Renminbi and the Swiss Franc in terms of the Euro. You are to present a report of no more than 500 words in length. Alternatively, you may present your results as a PowerPoint presentation with no more than 5-10 slides in total.
The 5 year movement of the Chinese Renminbi (CNY) in terms of the Euro (EUR) is shown below in Figure 1. Here the term CNY/EUR can be interpreted to mean 1 Chinese Renminbi is buying x number of Euros. Therefore, at the beginning of 2013, using the diagram below, 1 Chinese Renminbi was buying 0.11990Euros.
Figure 1:
The 5 year movement of the Swiss Franc (CHF) in terms of the Euro (EUR) is shown in figure 2 below. Here the term CHF/EUR can be interpreted to mean 1 Swiss Franc is buying x number of Euros. Therefore, at the beginning of 2013, using the diagram below, 1 Swiss Franc was buying 0.81229 Euros.
Figure 2:
The information you present in the report is up to you but there are some questions that must be specifically addressed. These are listed below and must be incorporated into your report/presentation.
a) Comment in no more than 1-2 paragraphs on the exchange rate movement of the two chosen currencies over the past 5 years and make any comments as to possible explanatory causes you believe may have contributed to any noticeable patterns, peaks or troughs in the diagrams shown.
b) Calculate the cross rates for the above two currencies (CNY/CHF) on a yearly basis over the past 5 years using the rates shown below and present your cross rate results in a separate table.
|
Year
|
Chinese Renminbi / Euro
|
Swiss Franc / Euro
|
|
|
|
|
|
End Jan 2013
|
0.11757
|
0.80695
|
|
End Jan 2014
|
0.12087
|
0.81831
|
|
End Jan 2015
|
0.14140
|
0.95719
|
|
End Jan 2016
|
0.14041
|
0.90241
|
|
End Jan 2017
|
0.13566
|
0.93605
|
c) Using the information from point b) above briefly comment on whether the Swiss Franc and Chinese Renminbi have appreciated or depreciated over this period in terms of the Euro.Justify your analysis with any relevant calculations (here, you can assume that the home currency is the Euro).
d) Plot the movement of the cross rates you calculated on a separate diagram. Clearly label your axes.
e) Comment on the cross rate movement of these two currencies over the past 12 months and make any comments as to possible reasons you believe may have contributed to noticeable patterns, peaks or troughs.
f) You must have a bibliography using the Harvard system of referencing citing any readings, links, urls's, etc. for the materials you used.A suggested number of references is between 4 - 10 references. Harvard referencing information can be found on the USQ Library main site. Note in particular the Web Documents and sites link if you are using internet references.
g) Finally, don't forget that your report should be concise and should be no more than 500 words in length or alternatively no more than 5-10 PowerPoint slides in total.You can present any technical information in appendices to your report if need be.