(Short Answer) Explain the effect of good U.S. economic data on the USD/EUR exchange rate.
(Short Answer) Explain the effect of good U.S. economic data on the USD/EUR exchange rate.
Homework Answers
The US and EU are the biggest and strongest economy of the world.USD/EUR exchange rate is very popular and widely used.
Currently USD1 = .86 Euro and Euro 1 = 1.16 USD
Effect of good U.S. economic data on the USD/EUR exchange rate-
- A trade surplus is good news for US dollar as it tells that US goods are in demand.
- If Gross domestic product (GDP) is rising, it is good for the country and currency as well. Interest rates between USA and Europe will have positive correlation, foreign investors will invest into USA and dollar value will appreciate.
- Any good news related to economy of USA and Europe, stabilize the relation between the currency too.
- Good news will increase the trade between USA and Europe. New technology and services will be shared.
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(Short Answer) Explain the effect of
good U.S. economic data on the USD/EUR exchange rate.
Today the current EUR to USD exchange rate is 1 EUR = 1.19 USD. According to...
Today the current EUR to USD exchange rate is 1 EUR = 1.19 USD. According to the Bloomberg consensus estimate, the EUR to USD exchange rate in four years is forecasted to be 1 EUR = 1.31 USD. You begin with 100 USD today and will invest in a European security that provides 10% annual returns (in EUR). Using this information, answer the following six (6) questions. 1) Is the USD forecasted to appreciate or depreciate relative to EUR? a)...
Take the following two exchange rates and compute the EUR/INR cross exchange rate. INR12.1225/USD and EUR.8145/USD....
Take the following two exchange rates and compute the EUR/INR cross exchange rate. INR12.1225/USD and EUR.8145/USD. In question 4, if there is a direct cross exchange rate of EUR.066215/INR, is there a triangular arbitrage opportunity? If yes, start with $50,000 and indicate how much triangular arbitrage profit exists for 1 trip around the triangle.
A. Take the following two exchange rates and compute the EUR/INR cross exchange rate. INR12.1225/USD EUR 8.145/USD. B. In question A, if there is a direct cross exchange rate of EUR.66215/INR, is there a triangular arbitrage opportunity? If yes, star
A. Take the following two exchange rates and compute the EUR/INR cross exchange rate. INR12.1225/USD EUR 8.145/USD.B. In question A, if there is a direct cross exchange rate of EUR.66215/INR, is there a triangular arbitrage opportunity? If yes, start with $50,000 and indicate how much triangular arbitrage profit exists for 1 trip around the triangle.
17. Export price Please refer to Table 5 in the datafile. If the EUR/USD exchange rate...
17. Export price Please refer to Table 5 in the datafile. If the EUR/USD exchange rate decreases to 0.9500, what will be the new USD sales price, assuming full pass-through. a) 12.54 b) 11.40 c) 13.20 d) 11.94 Ganado Germany exports lightbulbs to the United States. Based on a EUR/USD exchange rate of 1.0500, they expect the following results. Assumptions Price elasticity of demand Cost of capital -1,5 15% 2019 Sales volume (units) Sales price (USD) EUR/USD Sales price (EUR)...
Suppose your broker give you the following information: Spot exchange rate (USD/EUR) = 1.1370 One year...
Suppose your broker give you the following information: Spot exchange rate (USD/EUR) = 1.1370 One year forward rate (USD/EUR) = 1.1405 One year USD interest rate = 0.87% One year Euro interest rate = 0.65% a. Is there any violation of interest rate parity? b. How would you take advantage of any arbitrage situation? c. What is your profit? d. Suggest an equilibrium value for the forward rate
1. The current EUR/CAD exchange rate is 1.10. The current European interest rate (c.c.) is -0.4%(!),...
1. The current EUR/CAD exchange rate is 1.10. The current European interest rate (c.c.) is -0.4%(!), and the current USD interest rate (c.c.) is 0.8%. The volatility of the EUR/USD exchange rate is something like 15%. a) What is the 3-month forward EUR/USD exchange rate? b)Which currency is (expected to be) getting stronger c) If you thought the forward EUR/USD exchange rate was too high, would you prefer a 3-month call on 10000 Euros or a 3-month put on 10000...
If the revenue last quarter was 4.0 million EUR and the expenses were 3.7 million USD,...
If the revenue last quarter was 4.0 million EUR and the expenses were 3.7 million USD, then what would the USD/EUR exchange rate have to be for the profit margin to equal 14.0%? Report your answer rounded to exactly four decimal places. If the value is 2.104 or 2.10403, enter 2.1040 as your response. USD/EUR:1.1567
Suppose the annual interest rate is 2 percent in the US and 4 percent in Germany, the spot exchange rate is USD 1.60 / E...
Suppose the annual interest rate is 2 percent in the US and 4 percent in Germany, the spot exchange rate is USD 1.60 / EUR, and the 1year forward rate is USD 1.58 / EUR. What is the arbitrage profit in USD at the end of the year if you start by borrowing USD 5,000,000?
eturn to Site 2 of 5) The spot rate is given to you as 1.0983 USD/EUR....
eturn to Site 2 of 5) The spot rate is given to you as 1.0983 USD/EUR. The 3-month forward rate is provided by a broker as 1.1013 USD/EUR. The 3-month treasury bil rate in the United States is 0.08%. What is the 3-month Euro treasury bill rate that would be in equilibrium with the rest of these data? -0.1926 % 0.1926 % -0.001926% 0.001926 % IAm Finished/Submit for Grade Skip Question Save Answer Note: Clicking any button other than the...
Given: USD = 260 – 4ER USD = 80 + 2ER ER = the exchange rate...
Given: USD = 260 – 4ER USD = 80 + 2ER ER = the exchange rate If a rising (higher) U.S. interest rate will change USD by 20, and if a rising U.S. income will change USD by 50, find the equilibrium USD Select one: a. 172 b. 174 c. 178 d. 180 e. 176
17. Export price Please refer to Table 5 in the datafile. If the EUR/USD exchange rate decreases to 0.9500, what will be the new USD sales price, assuming full pass-through. a) 12.54 b) 11.40 c) 13.20 d) 11.94 Ganado Germany exports lightbulbs to the United States. Based on a EUR/USD exchange rate of 1.0500, they expect the following results. Assumptions Price elasticity of demand Cost of capital -1,5 15% 2019 Sales volume (units) Sales price (USD) EUR/USD Sales price (EUR)...
eturn to Site 2 of 5) The spot rate is given to you as 1.0983 USD/EUR. The 3-month forward rate is provided by a broker as 1.1013 USD/EUR. The 3-month treasury bil rate in the United States is 0.08%. What is the 3-month Euro treasury bill rate that would be in equilibrium with the rest of these data? -0.1926 % 0.1926 % -0.001926% 0.001926 % IAm Finished/Submit for Grade Skip Question Save Answer Note: Clicking any button other than the...
Given: USD = 260 – 4ER USD = 80 + 2ER ER = the exchange rate If a rising (higher) U.S. interest rate will change USD by 20, and if a rising U.S. income will change USD by 50, find the equilibrium USD Select one: a. 172 b. 174 c. 178 d. 180 e. 176
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