Lecture International trade and investment: Chapter 9 - John Gionea

Chapter 9:The Foreign Exchange Market Copyright ©2003 McGraw­Hill Australia Pty Ltd PPTs t/a International Trade and Investment by John Gionea Slides prepared by John Gionea Lecture Plan: • Determination of exchange rates • Foreign exchange quotations – Spot and forward rates • Structure and size of the foreign exchange market • Economic theories of exchange rate determination • Case: The Fall of the Baht Copyright ©2003 McGraw­Hill Australia Pty Ltd PPTs t/a International Trade and Investment by John Gionea Slides prepared by John Gionea FOREIGN EXCHANGE TRANSACTIONS • the foreign exchange rate is the price of one currency expressed in terms of another currency! 1A$=US$ 0.55 • Appreciation • Depreciation 1A$= US$ 0.60 1A$= US$ 0.50 Copyright ©2003 McGraw­Hill Australia Pty Ltd PPTs t/a International Trade and Investment by John Gionea Slides prepared by John Gionea Determination of the exchange rates Price $A1 S in $US 0.55 E D Quantity of $A Copyright ©2003 McGraw­Hill Australia Pty Ltd PPTs t/a International Trade and Investment by John Gionea Slides prepared by John Gionea Floating Currencies: Demand for the National Currency • Nation’s exporters paid in other hard currencies • Foreign companies undertaking direct and portfolio investment in the nation’s economy • "Bull" speculators in the nation’s currency • Nation’s Central Bank(RBA) selling US$ and other hard currencies for the nation’s currency • Foreign tourists visiting your country. Copyright ©2003 McGraw­Hill Australia Pty Ltd PPTs t/a International Trade and Investment by John Gionea Slides prepared by John Gionea ... - tailieumienphi.vn