Business World and Exchange Rate Problems
Today’s business world is becoming more difficult and complex because of the important numbers of factors to take into accounts. Then, with the globalisation, more and more firms tends to go global. This trend means that the risks are increasing, and have to be monitoring in order to run well. All the transaction are made with money like investment...
But, the main problem is that almost all countries have currencies different from each others. It means that their values are not the same, and they change every time. So, firms have to take into account this problem, because it could no be easy at all.
The aim of this essay is to understand the problem of exchange rate. In order to answer to this problematic, various topics will be analysed. First, the concept of exchange rate will be defined to understand well the topic, then a summary of the movements of the four most used currencies, Dollar, Euro, GBP and Yen and theirs exchange rates over one year. In a second part, the main factors which play a huge role in the fluctuation will be explain and, more precisely, an explanation on the movement that appeared on the graph of the first part. Finally, a brief commentary about Elecdyne’s recommendation to sell from a country to another.
Let’s start with the definition of exchange rate. According to investorwords.com, it means «Rate at which one currency may be converted into another. The exchange rate is used when simply converting one currency to another (such as for the purposes of travel to another country), or for engaging in speculation or trading in the foreign exchange market.» Thus, the exchange rates movement are very important and have to be monitoring in order to avoid cash loss.
In order to study the exchange rates movement, the currencies will be analysed over a year, one with the others. The period of time is from October 2009 to OCtober 2010.
Evolution of the GBP:
[pic]Let’s start with GBP. On this graph showing the movement between Euro
But, the main problem is that almost all countries have currencies different from each others. It means that their values are not the same, and they change every time. So, firms have to take into account this problem, because it could no be easy at all.
The aim of this essay is to understand the problem of exchange rate. In order to answer to this problematic, various topics will be analysed. First, the concept of exchange rate will be defined to understand well the topic, then a summary of the movements of the four most used currencies, Dollar, Euro, GBP and Yen and theirs exchange rates over one year. In a second part, the main factors which play a huge role in the fluctuation will be explain and, more precisely, an explanation on the movement that appeared on the graph of the first part. Finally, a brief commentary about Elecdyne’s recommendation to sell from a country to another.
Let’s start with the definition of exchange rate. According to investorwords.com, it means «Rate at which one currency may be converted into another. The exchange rate is used when simply converting one currency to another (such as for the purposes of travel to another country), or for engaging in speculation or trading in the foreign exchange market.» Thus, the exchange rates movement are very important and have to be monitoring in order to avoid cash loss.
In order to study the exchange rates movement, the currencies will be analysed over a year, one with the others. The period of time is from October 2009 to OCtober 2010.
Evolution of the GBP:
[pic]Let’s start with GBP. On this graph showing the movement between Euro