Define Historical exchange rates

Q: Explain pegged exchange rates

A: Exchange rate is the value of one country’s currency in exchange of other country’s currency.

Q: Give recommendations on how to reduce exchange rate exposure.

A: Exchange rate risk, often known as foreign exchange (forex) risk, is an inevitable risk of…

Q: Explain the followings:                          a.    Floating Exchange Rates  b.    Pegged or…

A: The price of a country's currency in reference to the currency of another country. When countries…

Q: Discuss how changes in the expected exchange rate affects current exchange rate

A: The rate at which one country currencies is exchanges with the currencies of another country, such…

Q: What is floating exchange rates?

A: Floating exchange rate: It is a scale is where the money cost of a country is set by the forex…

Q: What is the basic difference between floating and fixed exchange rates?

A: Answer: Fixed exchange rate is where, when revaluation or devaluation happens, the exchange rate…

Q: Define currency appreciation

A: Answer: The meaning of currency appreciation is nothing but an rise of one currency’s value…

Q: What is the difference between pegged and floating rate exchanges?

A: A nominal exchange rate that is firmly established by the monetary authority with regard to a…

Q: What are pegged exchange rates?

A: Pegged exchange rate: It is otherwise called a fixed exchange rate, which is a kind of conversion…

Q: Define spot rate (foreign exchange)

A: Spot rate (foreign exchange):  Spot rate is the present exchange rate at which a pair of currency…

Q: Differentiate between spot and forward exchange rates

A: Introduction: The spot rate is the rate at which the actual deal or sale is to take place…

Q: What is an exchange rate?

A: Exchange is the price of one currency derived in another form of currency.

Q: What is cross-exchange rate? Give an example.

A: The exchange rate expresses the value of a currency in terms of another currency. It determines the…

Q: Critically evaluate the role of exchange rate systems in influencing FDI and trade levels.

A: Foreign direct investment:  One of the primary methods of contemporary capital internationalization,…

Q: Factors that determine the value of a currency (exchange rate).

A: The value of a currency, or its exchange rate, is influenced by various economic, political, and…

Q: illustrate the different exchange rates regimes.

A: An exchange rate regime is a way a monetary determine of a country or currency union manages the…

Q: What are three main stages at which could be considered the effect of exchange rates? Discuss them…

A: There are three main stages in the life of a transaction exposure that could be considered the…

Q: What is the difference between spot and forward exchange rates?

A: Commodity market involves different rates for products depending on the trading transactions. The…

Q: Explain the meaning of a "trade balance"

A: Answer: Trade Balance is basically the difference between the country's imports and exports. It is…

Instruments of Foreign Exchange Market

Foreign exchange is a worldwide market in which one nation’s currency is converted into another nation’s currency. In further terms, exchanging of nations currency with foreign currencies. Foreign exchange happens at a specified rate which is termed the foreign exchange rate. The exchange rates are not constant continuously changing as they are derived by market forces of supply and demand. Widely used foreign currencies are the United States- dollar, Euro, Japanese Yen, British pound, and Australian dollar. US- dollar is the most denominated foreign currency. The Euro to US dollar is a widely used currency pair in the forex market as these two currencies represent the world’s enormous economy. Forex trade is simple as exchanging currencies at the bank. The main players of forex markets are the central banks, financial institutions, intermediaries, investments banks, and other banks. Central Bank is the supreme player who decides the currency value of their own nation on the forex market. Mostly foreign exchange-traded at FX market (forex market) when tourists’ visits a foreign country, import, and export happens between two countries.