Foreign Exchange

Topics: Foreign exchange market, Currency, Exchange rate Pages: 8 (1923 words) Published: June 23, 2014

Movement of the currencies
In the foreign exchange

A Research Proposal Presented
Marie Nica L. Enopia
English Department
Adamson University

In Partial Fulfillment of the Requirements for English II

Ara Joy Gamo
Charlene Nitura
Jude Christian Rivera
Hazel Rosalejos
Ronald Santosidad
Angel Mae Sitoy

March 2014


Title Page …
Table of Content…2


Conceptual framework…4

Statement of the problem…5

Significance of the study…6

Scope and delimitation…7

Chapter II Review of the Related Literature…8



Foreign Exchange
Different Currencies
Connection of currencies and foreign exchange market
Movements of currencies
Importance of both parties



This research aims to spread knowledge that link between devaluation and revaluation adjustment of the fixed exchange rate system in the foreign exchange market that affects banks now.
Specifically, it aids to answer the following questions:
1. What is devaluation?
a) Definition
b) Concept
c) Causes
2. What is revaluation?
a) Definition
b) Concept
c) Causes
3. What is the link between devaluation and revaluation in the fixed exchange rate system?


Foreign Exchange Market is the network of private citizens, corporations and government officials that trade overseas currencies among each other. It provides the international trade among nations, expanding markets for all the countries involved and establishing commercial relations that often outweigh the political bickering that often lead to senseless conflicts.



This chapter presents the different related literature and studies essential to the objectives of this study.
Chee (n.d), Foreign Exchange Market is those which are involve in the transaction of the business in merchandise in international between themselves. It is mostly used in local banks to trade domestic currency for the value of foreign currency. The bank will describe the amount of currency to be given to clients for them to receive competing international banknotes.

Picardo (2014), states that, it has no specific appearance of a marketplace. Instead, it is a communication network between business firms in international. It can be a big help in the industry in the future. Economy probably rises and as well relationship with other countries would do well. Investment of imported products or foreign currencies can aid investors to analyze their suggested price.

Also, Picardo (2014) explains that devaluation and revaluation are recognized as one-time events but consists of changes wherein it occurs occasional. Currency depreciation and appreciation which are triggered by market force are those floating exchanges rate system which are involve in the changes in the levels of currencies which changes continuously. Currency rates affect the imports and exports in terms of Foreign Exchange Market.

Frye (2001), the initial period after devaluation, the imports became more expensive while exports stay stagnant, where it leaves to a larger current account deficit. The domestic currency of the lower value results in imported and cost much more, where it leads to “imported” inflation. The devaluation has a big effect on the economy because through this the import and export of goods may change. The import becomes much more expensive and export may have lower value and this makes the lower domestic currency exports become more competitive in global markets, while the entrepreneurs will have expensive imports and may lead to an improvement in the current account deficit.

Brown (2008), states that financial markets are...
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