Professional Documents
Culture Documents
The Foreign Exchange Market
The Foreign Exchange Market
Foreign Exchange
The
A currency
exchange rate
dealer/bank
Forward exchange rates:
Competitive markets
For any two countries the spot exchange rate should change
in an equal amount but in the opposite direction to the
difference in nominal interest rates between the two
countries
S : spot rate at time 1, S : spot rate at time 1; i , i : nominal
1
2
$
interest rates in the US and Japan
to forecasting
Fundamental analysis
Technical analysis
Convertibility
Countertrade
Barter agreements by which goods and services can be