Assignment:
Foreign Exchange Market
One function of the foreign exchange market is to convert the currency of one country into the currency of another. A second function of the foreign exchange market is to provide insurance against foreign exchange risk. The most common approach to exchange rate forecasting is fundamental analysis. This relies on variables such as money supply growth, inflation rates, nominal interest rates, and balance-of-payment positions to predict future changes in exchange rates. Identify a country outside of the U.S. and its currency and initial exchange rate. Answer the following questions:
• How stable is the currency against the U.S. dollar?
• Why is this so?
• How many other countries trade with your chosen host country?
• Are there risks involved in doing business with this country?
• What are the projections for this country's expansion over the next 10 years?
Reference:
The Asia-Pacific Economic Cooperation ( https://www.apec.org/)
•It currently has 21 members including such economic powerhouses as the United States, Japan, and China.
•The stated aim of APEC is to increase multilateral cooperation in view of the economic rise of the Pacific nations and the growing interdependence within the region. This information in this website will assist you in completing this week's assignments.
Europa: Gateway to the European Union ( https://europa.eu/index_en.htm)
•It contains a broad array of information about the historical role and current activities of the EU in the global economy. This information will assist you in answering this week's discussions.
World Trade Organization (https://www.wto.org/)
•Its homepage provides useful information on what WTO has been doing to help producers of goods and services, exporters, and importers conduct their business globally. This information will assist you in answering the discussion questions this week.
Hill, W.L. (2011). International Business: Competing in the global marketplace (8th ed.). New York: McGraw-Hill Irwin. ISBN: 978-0-07-813719-8