International Trade and Finance Currency Tracking Project

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International Trade and Finance Currency Tracking Project

 

The lecture component of the International Trade and Finance class introduces the students to numerous concepts regarding management of foreign exchange exposure and international trade. However, the implications of these concepts cannot truly be understood until they are put into practice. Thus, the goal of this project is to enable you to put into practice the entire process of:

  1. Currency Tracking
  2. Analysis of movements in exchange rates
  3. Identifying factors affecting exchange rate movements
  4. Evaluating impact of economic, geographical and political factors on exchange rates.

 

During the course of this project, you will track the currencies of four countries against the US Dollar, conduct all the analysis underlying the movements in currency exchange rates and evaluate the impact of various factors affecting exchange rates. The period of tracking will be for 4 months from Friday 1st December, 2017 to Saturday, 31st March 2018.

 

At the end of the period, your team will be required to turn in a binder that documents your currency tracking activities over the course of the period. You can view this as the “Period Report” for your currency fund, and it is what you use to document the analysis and evaluation of the exchange rate movements of the assigned currencies. This will also record how professional a job you have done over the term, and the lessons you have learnt from the project.

 

 

Requirements:

 

  1. Each group of four students has been assigned 4 major currencies. You will track the exchange rates for each of these foreign currencies against the USD.

 

  1. Record the FOREX rates at the close of business in New York every working day for a period starting from Friday 1st December, 2017 to Saturday, 31st March 2018, using a reliable FOREX website.

 

  1. You may use EXCEL to store data and produce charts that show:
  2. a) Fortnightly and overall periodical movements in the FOUR FOREX Rates and
  3. b) Any relevant comparisons in the charts of the other FOREX rates.

 

  1. Prepare a report (4,000 words) that includes the following essential requirements:

 

  1. Introduction to Project
  2. Background of the country- The currency exchange arrangement for the currencies tracked.
  3. BOP components and trends for the country ( 5 years minimum)
  4. Describe the daily movements in ALL the exchange rates. Include Table of “closing rates” and full “chart” for the period.
  5. Highlight- Start, End, High and Low- for the period
  6. Identify which of the FIVE currencies has become stronger or weaker as a result of the changes in the exchange rates.
  7. Highlight the main events and activities in the world’s FOREX market during the period. (minimum of 2 articles for each currency tracked)
  8. Explain the impact of these events on each of the currencies you are tracking.
  9. Assess methods of managing foreign exchange exposure in these currencies
  10. Summary and Conclusion

Note: Students are expected to use market ‘jargon’ and market terminology as much as possible and make reference to G7, G20 and the Central Banks as appropriate.

Monetary Policies and Macroeconomics generally are very important here.

Awareness of the FOREX market in general and how the other major FOREX rates have performed generally is also important.  Please also note the importance of other markets including OIL and GOLD. Major Political events for the period should also be considered.

It is the quality of the overall report and NOT the quantity that is important.

  1. Discuss your tracking progress in the middle of week 10 with your teacher.
  2. Submit your completed final report on the
  3. Give a final Presentation in a “Business TV News” style on your charts for the full period.
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