Nobody downloaded yet

International Business: Foreign Exchange - Essay Example

Comments (0) Cite this document
Since the establishment of the Bretton Woods system in the late 1940s, the United States dollar has set established as the international currency or exchange. Although it is inherently true that currencies are often traded without trading the dollar, this dynamic is one that…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER94.6% of users find it useful
International Business: Foreign Exchange
Read TextPreview

Extract of sample "International Business: Foreign Exchange"

Download file to see previous pages This is obviously a relevant and extraordinarily important issue for the reader to consider; due in part to the fact that the power and wealth of the United States is predicated upon the US dollar remaining in the position of the currency of foreign exchange and international reserve. With this in mind, the following discussion and analysis will be concentric upon discussing the reality and gravity of the threats to the current system and what likely outcomes and potential impacts this could have at both a systemic level as well as a more localized level for corporations interested in maintaining relevance and success within the current market space.
Currently, both the Russian Federation and the People’s Republic of China are in high-level talks with regard to stepping away from the United States dollar as the global reserve currency and potentially establishing a new system that would bypass this long-standing legacy. In the eventuality that these talks are constructive and the combined economic power of these two extraordinarily powerful nations is able to craft a new global monetary system, the overall power that the United States might otherwise hope to affect around the world would be drastically and immediately reduced. Essentially, the United States has been able to exhibit nothing short of a monetary monopoly over the past 65 years (Hong, 2013). This monetary monopoly has allowed for the United States to engage with developing nations, set the interest rate upon which loans will be paid, and ultimately determine what resources around the globe should be priced at (Schuman, 2014). Whereas the free market still works within this particular scenario, the ability of the United States economic system to be a price maker as compared to a price taker is indirectly and directly impacted upon as a direct result of the dollar ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“International Business: Foreign Exchange Essay Example | Topics and Well Written Essays - 1250 words”, n.d.)
International Business: Foreign Exchange Essay Example | Topics and Well Written Essays - 1250 words. Retrieved from
(International Business: Foreign Exchange Essay Example | Topics and Well Written Essays - 1250 Words)
International Business: Foreign Exchange Essay Example | Topics and Well Written Essays - 1250 Words.
“International Business: Foreign Exchange Essay Example | Topics and Well Written Essays - 1250 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF International Business: Foreign Exchange

Market for Foreign Exchange

...and investment without the existence of such markets that facilitate the conversion of one currency into another. It offers high liquidity advantage to users, boundary-less trading and lower risk compared to other assets (Madura, 2009). References: Bollerslev, T., & Domowitz, I. (1993). Trading patterns and prices in the interbank foreign exchange market. Journal of Finance , 1421–1443. Coyle, B. (2001). Foreign Exchange Markets. Chicago: Fitzroy Dearborn Publishers. Levi, M. D. (2009). International finance . Oxon: Routledge. Madura, J. (2009). International Financial Management . Mason: South-Western Cengage Learning. Riehl, H., &...
3 Pages(750 words)Essay

Foreign Exchange

...? Foreign Exchange Question How did the Bretton Woods system operate? What caused its collapse? Some think the current system of managed but floating rates is too unstable. What would generate the instability? The Bretton Woods system is a landmark system designed for monetary exchange rate management that came to play in 1944. The Bretton Woods agreement was developed in New Hampshire in 1944. The major outcomes of the agreement were the formation of an International Monetary fund. The system proposed the introduction of a pegged foreign monetary exchange rate system that was adjustable. Under the system, other than U.S, other countries central banks were assigned the task of maintaining a fixed exchange rate between the dollar... and their...
3 Pages(750 words)Essay

Derivatives and Foreign Exchange

...unexpected exchange rates’ fluctuations, which have the impact of severely influencing negatively the market position/share with respect to its active competitors (Moffet, Stone-hill, & Eiteman, 2009). With this happening, the organization’s future cash flows and values are also affected. Therefore, transactions exposing any organizations of firms to certain foreign exchange risks have additional potential exposure risks to the economical performance, as can be caused by any other business involvements, i.e., future cash flows from the available fixed assets. Hence, it can be concluded that a shift in the exchange rates that influences the demands for...
10 Pages(2500 words)Coursework

The Foreign Exchange Market

...Running Head: Foreign Exchange Market Foreign Exchange Market [Saifullah shahid] [The of the appears here] Foreign Exchange Market The foreign exchange rate is simply the price of one currency in terms of another. Not surprisingly, this price can be viewed as the result of the interaction of the forces of demand and supply for the foreign currency in any particular period of time. Under floating exchange rate mechanism the country's currency is valued through hundreds of thousands of international transactions that take place. John Sloman...
8 Pages(2000 words)Essay

Foreign Exchange Dealing Room

...are interested in dealings in South Africa in order to generate income for the bank. The International fund managers also are active participants in this rand who try and manage the exposures to these investments in South Africa so as to reduce the risk and produce income for the funds. The major banks of the world are authorized dealers in foreignexchange and they have large treasury operations. They provide a number of services like they help their potential customers gain access to financial markets, help in the management of their financial exposures arising out of the banking ...
40 Pages(10000 words)Essay

Foreign Exchange Risk

.... Ltd is a multinational company having its business operations all over the world and thus is exposed to foreign exchange risk in several ways. The company has manufacturing operations in different parts of the world and it also exports from several countries including Japan. Besides, it purchases parts and sells its products in international markets including the US and European countries in foreign countries. This all makes the company severely exposed to currency risk enabling foreign exchange fluctuations to greatly affect its operations and performance. Not only that the foreign...
6 Pages(1500 words)Essay

Foreign Exchange

...FOREIGN EXCHANGE SITUATION: You are assigned the duty of ensuring the availability of 100,000 yen for the payment that is scheduled for next month. Considering that your company possesses only U.S. dollars, identify the spot and forward exchange rates. THE SPOT AND FORWARD EXCHANGE RATES The spot rate per Table 11.1 is Y1 = $0.00903.50, which means that if I buy 100,000 Japanese yen today , I will need to pay $903.50. The forward exchange rate for a month from now is $0.00904.80; the 3-month and 6-month quoted rates are, respectively, $0.009074 and $0.009124. The trend is for the Japanese yen to rise in value over the next six months. ANALYSIS Looking...
2 Pages(500 words)Essay

Foreign Trade and Exchange - International Business

...Foreign Trade and Exchange - International Business Foreign trade is primarily characterized byexports and imports between trading nations. The practice of countries engaging in trade has been in place since time immemorial. Mercantilism set the pace for state relations and international business, creating interdependence between nations in a bid to exploit each country’s advantage in trade and business (Justin 339). Business and trade practices have evolved and revolutionized over the years. Today, diversity and dynamism have encompassed trade and exchange in local and...
1 Pages(250 words)Essay

Investigate Foreign Exchange Markets

... operations in the crisis countries. This paper shows the impact of increased exchange risk on stock return volatility and market risk. References Philipp, H (2010). Currency Competition and Foreign Exchange Markets. New York: Cambridge University Press. Burkhard, D (2009) Welfare of Transparency in Foreign Exchange Markets. California: International Monetary Fund. Copyright H R Machiraju (2012) International Financial Markets. New York: New Age.Inc Julian, G., Antonio, A. (2007) Introduction to Global Business. California: Cengage Learning. Copyright Peter J. Quirk (2010) Issues in International Exchange and Payments System. Texas: International Monetary Fund. Copyright... Foreign Exchange Market...
3 Pages(750 words)Research Paper

Foreign Exchange Risk

... forward foreign exchange contract and which they decide with the bank to be one percent of the Equipment amount, then the Alliance will have to pay 505,000. Therefore Alliance Design Concepts will not be worried about the fluctuation in the foreign exchange rate. They will have saved over US$ 21000 as a result of buying forward exchange contract. In conclusion, fluctuation in the rates of foreign exchange can cause a lot of impact on profits of companies especially those dealing in international business. However, this risk can best be mitigated by buying the forward exchange contract. References Bragg, S.M. (2011). Risk Management: Foreign Exchange. Hoboken, NJ: Wiley... Foreign Exchange Risk...
3 Pages(750 words)Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic International Business: Foreign Exchange for FREE!

Contact Us