Business World and Exchange Rate Problems

Exchange rates play a pivotal role in the relationships between individual economies and the global economy. Almost all financial flows are processed through the exchange rate, as a result the movements and fluctuations of the exchange have a significant impact on international competitiveness, trade flows, investment decisions and many other factors within the economy. Due to the increasing globalisation of the world economy, trade and financial flows are becoming more accessible

This paper aims to compare the Japanese Yen against the US Dollar over a five year period starting from 2005 till 2010. The exchange traded fund for Japanese Yen shall also be discussed in the paper and afterwards an analysis of both the currencies shall be presented. There are different factors that influence the exchange rate differences between any two chosen currencies. The effects produced by these different exchange rates can be of quite different intensity. The most common elements that have an impact on exchange rate difference include economic factors, socio political factors and other behavioral or technical factors also. The macroeconomic factors such as growth of a country, employment rate, gross domestic product etc. All

The graph of economic growth look so nice and strong. People were being very optimistic about the economy, making Japan in the emotion of euphoria, which started a trend of investing.

This essay will present the problem of the dollar rise, and which are the cons for us (Mexicans) and other countries. Well, the experts on the topic, and problem, ensure that the dollar will increase respect the Mexican peso and the forecast for 2017 are that it will be valued at 22 pesos.

In order to answer the research question, it is imperative to evaluate the economic impact of the current exchange rate regime.

The currency exchange between the yen and the USD is currently 1 USD to 112.13 Yen. Japan is the world’s third largest economy. They are struggling compared to previous years but “its currency is soaring against the dollar” (Mullen, 2016) and is “up more than five percent since Britain’s vote to leave the European Union” (Mullen, 2016). The yen this year alone has gained more than 19 percent and is trading about 100 against the dollar (Mullen, 2016). “A strong yen is bad news for many Japanese companies and the economy” (Mullen,

It is unlikely for the Euro to gain stability based on the current market movement and expected market movement in the next three months. With fed intervention, it is expected to see the Euro/USD exchange rate rise to 1.05, (Eurorateforecast.com, 2015). The Euro is expected to continue declining for the next three months and even in the foreseeable future. The declining rate has enabled currencies such as USD and Sterling Pounds to make gains against the Euro in a very substantial manner. The declining rate of the Euro/USD exchange rate is expected to follow the trend outlined below in the next three months. The Euro/USD exchange rate is expected to fall to 1.07 in a period of one month and then to 1.05 in three months. The latter will see the USD gain strength against the Euro, (Bank, 2015). The strength of Euro mainly depends on the desire of private investors to hold assets in Euros. The European Central Bank has failed to check the anti-inflationary measures that will assist in seeing the Euro strengthen against the US Dollar. The Central bank has also failed to maintain the price stability that has facilitated the continued deterioration of the Euro.

Those organizations wishing to engage in international business transactions have many elements they must consider. One of these elements is that of foreign exchange rates, the rate at which one currency can be converted into another (Hill, 2014, p. 296). While a company may be located in the United States, they may engage in commerce with organizations in foreign markets that require payment in their domestic currencies. Organizations must pay careful attention to these exchange rates, as their fluctuations can significantly impact the costs of doing international business, as demonstrated in the first section. While exchange rates are determined by the supply and demand of currencies on the foreign exchange market

Joining the Euro will reduce exchange rate volatility with the main EU trading partners. In order to maintain stable exchange rates between the Euro and the participating national currencies so as to avoid excessive exchange rate fluctuations on the internal market, The Europa (2007) shows he ERM II was set up on 1 January 1999. After agreeing a central exchange rate between the Euro and the country's currency, the ERM II allows the currency to fluctuate up to 15% above or below the central rate. Moreover, when necessary, the ECB and the central bank of the non-Euro area Member State can support the currency to keep the exchange rate in the safe ratio. In fact, the Euro is stronger compared to 10 years ago. According to Eurostat (2011), the exchange rate between the Euro and Pound increased from 1EUR = £0.621 in 2001 to 1EUR = £0.872 in 2011, or 1EUR = 0.896 USD in 2001

An exchange rate tells you how much of one currency you can exchange for another. Generally, there are two types of exchange rate which is widely used by many countries: fixed and floating exchange rate. Nowadays, it is necessary to know what are their advantages as domestic currencies are essential to the method that economies run. But they are both not perfect. In 1973, with the collapse of the Bretton Woods system, countries that used fixed exchange rate were seriously affected and floating exchange rate rose afterward. However, there still had some debates on both fixed-rate and floating exchange rate. Especially after the Asian financial crisis in 1997, the debates became more intense. A fixed exchange rate once again favored by some countries. As we can see from the history, they have benefits and drawbacks. Each of them has their own characteristics. It is not possible to determine which exchange rate is better because the choice of the appropriate one may vary from different countries. In other words, the exchange rate regime changes along with the development of the international economic environment. That is why there are some different exchange rate regimes which lies between them in reality. Developing countries that have unstable economies and politics mostly use the fixed exchange rate to guarantee their residents a normal standard of living. On the other hand, developed countries such as the U.S, Great Britain are using floating exchange because

The use of money has become most prevalent in terms of purchasing goods and services instead of the old way of bartering. Most nations have different types and rates of money, so countries have to figure out the proper exchange rate that reflects a consistent balance when dealing with the rest of the world. An important observation made by Weaver is that there needs to be a balance of trade. More specifically, there needs to be a balance between a nation’s exports

In the following content, we will mainly focus on four aspects of the flexible-price monetary model of exchange rate determination. To begin with, we are going to talk about the logic behind the

The aim of this report is going to analyse the importance of forecasting future exchange rates and the relationship of Purchase Power Parity. Also is going to test if this is even possible by applying simple theory of the International Finance statistics. For many economists, governments and investors is very important the forecasting of exchange rate in order to organise their next strategical movements in order to invest money in a country in order to diminish the risks and increase the returns. By saying forecast future exchange rate is when we are able to predict the change in the exchange rates between two countries. Purchase Power Parity (PPP)

Understanding and forecasting the foreign exchange rate are specially important for multi- national companies because they make important decisions based on forecasting information. I mention some of these decisions.

Name: Anjali Goyal Course: MBA (1st shift) Batch: 2015-2017 Section: A Semester: 3rd Semester Subject Name: IFM Subject Code : MS - 217 Topic of assignment (Project): Floating and Fixed Exchange Rate Faculty Name: Mr. Mikhilesh Yadav Date of submission of assignment : October 19, 2016 Signature of receiver