You are given foreign currency forecasts for a number of currency pairs in Table 1. You are a forex trader and wish to use the forecasts for September 2021 to make a profit. Obtain forward rates for five chosen currency pairs from table 1 with a maturity of September 2021.
You are given foreign currency forecasts for a number of currency pairs in Table 1. You are a forex trader and wish to use the forecasts for September 2021 to make a profit. Obtain forward rates for five chosen currency pairs from table 1 with a maturity of September 2021.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
You are given foreign currency
trader and wish to use the forecasts for September 2021 to make a profit.
Obtain forward rates for five chosen currency pairs from table 1 with a maturity of September
2021.
Transcribed Image Text:https://www.wsj.com/market-data/bonds/gO
On-campus students may choose to obtain spot rate data from the IRESS trading room.
Table 1: Foreign currency Forecasts: Source NAB September 28, 2020
Exchange rate forecast
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Majors
AUD/USD
0.74
0.76
0.77
0.77
0.78
0.79
0.80
0.80
NZD/USD
0.66
0.67
0.68
0.69
0.70
0.70
0.72
0.72
USD/JPY
103
103
100
100
100
99
98
98
EUR/USD
1.22
1.23
125
1.26
1.27
1.28
1.30
1.31
GBP/USD
1.36
1.40
1.43
1.44
145
1.47
1.48
1.40
USD/CHF
0.91
0.91
0.91
0.91
0.91
0.92
0.91
0.91
USD/CAD
1.32
1.29
1.28
1.28
1.27
1.26
1.25
1.25
USD/CNY
6.70
6.60
6.55
6.50
6.45
6.40
6.35
6.30
Australian Cross Rates
AUD/NZD
1.13
113
113
112
1.11
1.12
111
1.11
AUD/JPY
76
77
77
78
78
78
78
AUD/EUR
0.61
0.61
0.62
0.61
0.62
0.62
0.61
0.61
AUD/GBP
0.54
0.54
0.55
0.54
0.54
0.54
0.54
0.54
AUD/CHF
0.67
0:69
0.71
0.71
0.72
0.73
0.73
AUD/CAD
0.97
0.98
0.99
0.99
0.99
0.99
1.00
1.00
AUD/CNY
4.96
4.99
5.03
5.04
5.06
5.04
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