Title Foreign Exchange Market - Research Paper Example

Foreign Exchange Rate al Affiliation) Euro is the currency that most countries in Europe use as a legal tender fordoing business. Statistics shows that by 2015, about 337 million Europeans use this money. The initial exchange rate for Euros to the dollar is one Euro is equal to 1.11 Us Dollars (Hill,2011). The Euros remains stable against the US Dollar. The US Dollar is facing pressure from Euros because the Euros have evolved to being the dominant reserve currency. New reserve currency affects the stability of the dollar against the Euros Since the introduction of Euros, the Forex traders have observed an upward development of the money as compared to the American Dollar (Hartmann, 2008).

The German is expecting a 0.6% gain in CPI. The cost of durable goods ordered has increased to 2.8% favoring the growth of Euros. The value of the quarterly GDP of US released has fall short of what was the initial estimate. US Q4 is 2.1% while the original estimate was 2.6%. Although the US Dollar is among the most traded currency, many countries in Euro zone use the Euros money. The interest rate is a weapon used to influence the stability of Euros against the US Dollar. In the Europe region ranking, Germany is seventh in trade Netherlands being its primary partner.

Germany trades with not less than 17 European Countries. Its strategic location favors marketing to the rest of the countries. Many countries neighboring Germany has preferred the enormous growth in its economy (Floyd, 2010). There is little risk associated with Germany thus doing trade activities with German is promising. Germany has numerous strengths that will lead to real trading activities. The country has a solid base for industrialization as per the quarter GDP (Hill, 2011). The country is among the few countries that is profitable and contributes competition to the rest of the world.

German has a diversified export basis that makes trading easy and efficient. The Germans show aggressiveness and are capable of achieving more stable economy and currency. The GDP of German is predicted to have big potential and able to overtake other countries. By 2030, the German predict their GDP to rise to $60,000, a figure past Japan and U.S (Floyd, 2010). The German think this is possible with their dominant industrial sector, which is the most productive in the world.ReferencesFloyd, J. (2010). Interest rates, exchange rates, and world monetary policy.

Berlin: Springer.Hartmann, P. (2008). Currency competition and foreign exchange markets. Cambridge, U.K.: Cambridge University Press.Hill, C. (2011). International Business: Competing in the Global Marketplace (8th ed.). New York: McGraw-Hill Irwin