KU Currency Change Impacts Business & Monitoring Central Bank Intervention Discussion
Question Description
I’m working on a Economics exercise and need a sample draft to help me understand better.
Accessing Futures Quotes
Go to a web site that provides quotations for currency futures. Determine the prevailing futures price of the main foreign currency for your business. Go to a web site that provides exchange rate quotations and determine the prevailing spot rate. What is the discount or premium of the futures price? (see equation below)
Futures price website:
https://www.tradingview.com/markets/futures/quotes-currencies/
https://www.barchart.com/futures/currencies
Currency (spot rate) website:
https://www1.oanda.com/currency/converter/
Make sure all quotes are made relative to the U.S. Dollar. Calculate the premium (positive result) or discount (negative result):
(Futures price – Spot rate)/Spot rate
Monitoring Central Bank Intervention
- How can your business be affected if the Fed attempts to strengthen the dollar in the foreign exchange market?
- If the Fed decides to weaken the dollar, how will your business be affected?
- How can indirect central bank intervention affect your business even if there is no impact on exchange rates?
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