Unformatted text preview:

PowerPoint PresentationSlide 2Slide 3Slide 4Slide 5Slide 6Slide 7Slide 8Slide 9Slide 10Slide 11Slide 12Slide 13Slide 14Slide 15Slide 16Slide 17Slide 18Slide 19Slide 20Slide 21Slide 22Slide 23Slide 24Slide 25Slide 26Slide 27Slide 28Number of 1 country’s currency that is equal to 1 unit of another country’s$1 = 0.6292 € $1 = 0.5051 £1€ = $ 1.5892 1£ = $ 1.9797 $1 = 0.7535 € $1 = 0.6809 £1€ = $ 1.33 1£ = $ 1.47CurrencyLast TradeU.S. $ ¥en12/03Euro 12/03Can $ 12/03U.K. £ 12/03Aust $ 12/03SFranc 12/03U.S. $ 1 0.009328 1.222 0.7705 1.733 0.7403 0.7894¥en 107.2 1 131 82.59 185.8 79.36 84.62Euro 0.8181 0.007632 1 0.6303 1.418 0.6057 0.6458Can $ 1.298 0.01211 1.586 1 2.249 0.9608 1.025U.K. £ 0.577 0.005382 0.7053 0.4446 1 0.4272 0.4555Aust $ 1.351 0.0126 1.651 1.041 2.341 1 1.066SFranc 1.267 0.01182 1.548 0.976 2.195 0.9378 1CurrencyLast TradeU.S. $¥en 3/04Euro 3/04Can $3/04U.K. £ 3/04Aust $ 3/04SFranc 3/04U.S. $ 1 0.009473 1.214 0.7637 1.816 0.7481 0.7771¥en 105.6 1 128.2 80.61 191.7 78.97 82.03Euro 0.8237 0.007803 1 0.629 1.496 0.6162 0.6401Can $ 1.31 0.01241 1.59 1 2.378 0.9796 1.018U.K. £ 0.5506 0.005216 0.6684 0.4204 1 0.4119 0.4279Aust $ 1.337 0.01266 1.623 1.021 2.428 1 1.039SFranc 1.287 0.01219 1.562 0.9827 2.337 0.9627 1CurrencyLast TradeU.S. $N/A¥en11/05Euro 11/05Can $ 11/05U.K. £ 11/05AU $ 11/05Swiss Franc 11/051 116.895 0.8293 1.1791 0.5626 1.3469 1.28050.0086 1 0.00709 0.01009 0.00481 0.01152 0.0109541.2059 140.964 1 1.4219 0.6785 1.6242 1.54420.8481 99.1350 0.7033 1 0.4771 1.1423 1.08601.7774207.76901.4739 2.0958 1 2.3940 2.27600.7424 86.7886 0.6157 0.8755 0.4177 1 0.95070.7809 91.2885 0.6476 0.9209 0.4394 1.0518 1 1 U.S. $ = 1 ¥en = 1 Euro = 1 Can $ = 1 U.K. £ = 1 AU $ = 1 Sw Franc =Currency Yahoo Nov 2005Yahoo Mar 2005Yahoo Mar 2004Yahoo Dec 2003TextOct 2002U.S. $ 1 1 1 1 1¥en116.9 106.33 105.6 107.2 123.3Euro0.8293 0. 7696 0.8237 0.8181 1.01Can $1.1791 1.216 1.31 1.298 1.5987U.K. £0.5626 0.5342 0.5506 0.577 0.6391Aust $1.3469 1.2937 1.337 1.351 1.84SFranc1.2805 1.196 1.287 1.2671.49Currency PairPriceEUR/USD 1.3548AUD/USD 0.9098GBP/USD 1.6365JPY/USD 0.0097CAD/USD 0.9404CHF/USD 1.1013Currency PairPriceUSD/EUR 0.7381USD/AUD 1.0987USD/GBP 0.6112USD/JPY 103.0550USD/CAD 1.0636USD/CHF 0.9080How many $$ you get with one of theirs?How many $$ does it take to get one of theirs?d. Devaluation – change rate1. Fixeda. $1 = 1/35 oz of Goldb. 4 German marks = 1/35 oz of Goldc. $1 = 4 German marksd. Depreciation – change rate2. Flexiblea. aka Floatingb. Determined by supply and demandc. $1 = 4 German marks3. Peggeda. Tied to another currencyb. Often the $$ Price of currencyQuantity of Currency$6$5$4$3$2$110 20 30 4050600DBuyers and Sellers Determine Exchange RateDSS1. Demand for foreign products2. Changing economic conditions - Inflation makes goods more expensive3. Interest Rates4. Government InterventionPeggingWould the value of the dollar, compared to the Swiss franc, increase if the exchange rate went from 1.3 francs = $1 to 1.2 francs = $1?Changes in the Exchange Rate•Determinants: 1. A change in national income (relative to trading partners) people buy more, or less of everything. 2. A change in the inflation rate in one country. a. Higher rate decreases demandb. Lower demand - depreciation3. A change in interest rates (relative to rates abroad). a. High rates attract moneyb. Currency appreciates4. Changes in tastes$: (1)Appreciation or (2)Depreciation?1. The US reduces tariffs on Mexican products. 2. Mexico encounters severe inflation. 3. Deteriorating political relations reduce American tourism in Mexico. 4. The US economy moves into a severe recession5. A bartender puts a lime in a Corona and beer sales jump6. The Mexican government encourages American firms to invest in Mexican oil fields 7. A large federal government budget deficit raises interest rates in the USEuro: (1)Appreciation or (2)Depreciation?1. An American importer purchases a shipload of Bordeaux wine.2. BMW decides to build an assembly plant in LA3. A CVCC student decides to spend a year studying at the Sorbonne.4. A Spanish manufacturer exports machinery to Morocco on an American freighter.5. The US incurs a balance of payments deficit in its transactions with Belgium.6. A US government bond held by an Italian citizen matures.7. It is widely believed that the international value of the Euro will fall in the near future.Would each of the following developments cause the dollar to appreciate or depreciate?a. The perception by other countries that the quality of US goods is improvingb. A large budget deficit that raises interest rates in the USc. Intervention by the Federal Reserve in foreign exchange markets that results in dollars moving into those marketsd. A poor harvest in most of the grain-producing countries of the world except the USe. The expectation of war between several Middle Eastern


View Full Document

VCCS ECO 120 - International Finance

Download International Finance
Our administrator received your request to download this document. We will send you the file to your email shortly.
Loading Unlocking...
Login

Join to view International Finance and access 3M+ class-specific study document.

or
We will never post anything without your permission.
Don't have an account?
Sign Up

Join to view International Finance 2 2 and access 3M+ class-specific study document.

or

By creating an account you agree to our Privacy Policy and Terms Of Use

Already a member?