Question

1. You will see some trends in the movement of each currency vs. the US Dollar. Provide at least one reason for the trend(s) in each of the currencies.

please elaborate

Answer 1

Answer 1:

We see some trends in the movement of each currency vs. the US Dollar. The reason for the trend(s) in each of the currencies as below

• The import and export content of the nation makes the trend of currency of each nation with the USD currency. If one nation makes larger import than export, their their current account will show deficit and it will impact the negativity of the currency of that nation with USD. Thus the currency of that nation will be reduced with respect to the USD.
• The lack of capability of the nation to invite foreign investments so that they can improve their foreign capital gains. If nation is able to attract larger foreign investments, than they can get positive improvements in the currency with USD.
• The economy condition of the national and psychology interest of the investors to invest in the nation’s economy will also boost the positive trend of the currency in the nations.

Below key currencies that shows trend and their reasons as below

• INR vs USD Currency Trend – INR is getting week with respect to the USD due to higher imports cost. The high import cost is mainly due to oil products.   
• China Yuan vs USD Trend – China Yuan currency is showing positive trend and China Tuan currency is getting strong with respect to the USD currency due to high export of the nation and lower import in the China nation.
• Euro vs USD Currency – Euro currency is getting strong with respect to the USD currency due to the well economy management by the Europe in the region with lower external interventions.
• UKP Currency vs USD Currency – UKP currency is strong with respect to the USD currency s UK is able to manage the balance between the import and export for their national requirements.