This website uses cookies to ensure you have the best experience. Learn more

International Exchange Rates. "The Gold Standard"

1322 words - 6 pages

In this lecture we will be learning about the golden standard and how it relates to the worlds major currency exchange markets along with the positive and negative aspects of using a gold standard. The golden standard is when a country sets there standard to there rate in gold per ounce or unit. That would give the other countries knowledge of what there rate would be if an exchange was to be made pertaining to currencies. No one countries government can produce more money without the standard amount of gold. As stated by Moffatt, "that the value of money is set by the supply and demand for money and the supply and demand for other goods and services in the economy." (Moffatt, 2007)The ...view middle of the document...

EUR/USD = Euro vs. U.S. Dollar, 2. JPY/USD = Japanese Yen vs. U.S. Dollar, 3. USD/CHF = U.S. Dollar vs. Swiss Franc, 4. AUD/USD = Australian Dollar vs. U.S. Dollar, 5. GBP/USD = British Pound vs. U.S. Dollar, 6. USD/CAD = U.S. Dollar vs. Canadian Dollar" (Miliaresis, 2005) The Forex market is open seven days a week twenty four hours a day, it never sleeps unlike people. So the trading never stops. Banks and people all over the world are constantly trading and frequent changes tend to take place rather rapidly and on a daily bases. In the Forex markets people who want to invest does not have the confusion of dealing with a middle person. All there transactions go straight to the market maker. This allows for the cost of the orders to be at a cheaper and reasonable price. It also allows for orders to be handled in a quicker or timely manner.Participants of the Forex are from around the world and the three places that take in the most transactions would be London, New York and Tokyo. London would be the first out of the three taking in at least a total of all transactions which would amount to approximately thirty percent of the market, "The City does not dominate all financial markets, but Forex is one that it does. UK's foreign exchange market accounts for almost one-third of global turnover, with its share steadily edging higher - helping to strengthen the City's position as a financial centre" (New Economist, 2006) And with New York following second taking in at least a total of all transactions which would amount to approximately sixteen percent of the market, and then Tokyo following third taking in at least a total of all transactions which would amount to approximately ten percent of the market.Positive and Negative Aspects.Some positive aspects of the gold standard are within the Forex where a trade or exchange of currencies from one country to another will have to be met with an agreement between the both parties which relies on each others needs and reserves. This makes the exchange beneficial for both parties involved. As stated by Forex Market "Another essential feature of the FOREX market, no matter how strange it might seem, is its stability. Everybody knows that sudden falls are very typical of the financial market. However, unlike the stock market, the FOREX market never falls. If shares devalue it means a collapse. But if the dollar slumps, that only means that another currency gets stronger." (Forex Market Currency Trading, 2004 - 2006)Another positive aspect would be that the Forex is open all the time and trading continues at all hours of the day and night so having no specific set time gives who ever that is doing there business through Forex personal flexibility. The negative side to that would be transactions done in cross...

Other Essays On International Exchange Rates. "The Gold Standard"

"Third World Mining Is Primarily For The Benefit Of The First World."

1834 words - 8 pages , artistic process, the cutting of a fine diamond without a standard template, left to the eye of the cutter, now became efficient with a vengeance. With new cutting technologies, mainly diamond-edged blades, the diamond, for the first time, became a public commodity on a marketable scale.Furthermore, diamonds have become a standardized economic commodity as well, like gold or silver, but with a more rarefied and esoteric system of exchange, which

Should The UK Join The Euro Or Remain Master Of Its Own Fiscal Destiny. What Are The Arguments For And Against?

3005 words - 13 pages cultural and language barriers. Indeed the EU has never encouraged labour migration, commenting that it is 'neither feasible.. ..nor perhaps desirable' If inflation is low then the solution to a static labour force is reduced nominal wages and prices. MP Heathcote-Amery foresees dangerous precedent for this 'tool' citing the gold standard in 1925 when real prices fell. However the rigidity of the labour force meant wages rose. The consequence was

Applying International Trade Concepts Paper, James Michael Smith

1423 words - 6 pages Concepts Simulation and explain the advantages and limitations of international trade, explain the effects of international trade on the US economy, go over how changes in fiscal and monetary policies affect exchange rates, list four key points from the reading assignments that were emphasized in the simulation, apply what was learnt to the workplace, summarize with the Concept Summary that was included in the simulation. The paper will then conclude

Macroeconomic Review Of Japan

9970 words - 40 pages that can affect expectations of the future price level rather than just expectations of future interest rates. The effect of changing price-level expectations and exchange rates should be much more powerful than that of changing long nominal interest rates or expectations of future short interest rates that are already rather close to zero. Obviously, there is no bound to exchange rates and price level expectations similar to that on nominal

A Mass Spectrometer Inlet System For Sampling Gases Dissolved In Liquid Phases

4128 words - 17 pages MEASUREMENT OF PHOTOSYNTHESIS A photosynthetic system in which oxygen is being produced and consumed may be considered as an exchange reaction: 2HuO + 02 + 4H The rate of reaction 1 is the total production of oxygen (PT) and the rate of reaction 2 is the total uptake of oxygen (LTT). If this system is placed in water with a natural isotopic abundance (0.2 atom per cent 018) and supplied oxygen gas enriched in 018, the rates PT and UT can be computed

New EU States And The Adoption Of The Euro

3551 words - 15 pages         Lithuanian Litas (LTL) foreign exchange rates         17         Estonian Kroon (EEK) foreign exchange rate         18         Outside ERM II: Czech Koruna (CZK) foreign exchange rate         18         Hungarian Forint (HUF) foreign exchange rate         19         Polish Zloty (PLN) foreign exchange rate         19 The New EU States and their Adoption of the Euro Introduction The EU has grown in

HR Global Recruitment And Selection

3279 words - 14 pages and legal requirements." (Bratton and Gold 2003: 221)Globalization has resulted in a new more dynamic international workplace. The ability to adapt and respond to customer needs has now become the forefront in global competitiveness for a firm. The basis of an organization is deeply rooted in its ability to attract and retain global talent to achieve its competitive advantage. New market trends have translated into enhanced customer expectations

Evaluation Of Stratigic Management

4178 words - 17 pages purchasing power of potential customers and the firm's cost of capital. The economic factors that affect the organization are Interest rates, level of inflation, Employment level per capita, Long-term prospects for the economy Gross Domestic Product (GDP) per capita, economic growth, exchange rate, business cycle, GNP trend, money supply, disposable income, energy available and cost , etc(Johnson & Scholes, 2001).Socio cultural Factors - The

Accounting Reporting Criteria

1207 words - 5 pages to the International Accounting Standards Board (IASB) (Hill, 2004). Many countries outside of the United States adopt this accounting standard. International Monetary Fund (IMF) is an international system dealing with floating exchange rate. This international procedure gives countries more control over their own monetary policies (Hill, 2004). Currency challenges will always exist when doing business with foreign nations this is an ongoing

Quality Textiles International Paper

1025 words - 5 pages requirements. Quality Textiles International's quality assurance department stated that the fabric is weighed regularly and carries a mean of 2.73 and a standard deviation of 0.31. Finally, this paper will conduct a thorough analysis to obtain the correct mean and standard deviation and also determine how many points are out of control. After conducting a weight sample of weaved material, the determined mean and standard deviation where revealed

Financial Planning Process In An Engineering Business

1253 words - 6 pages 1 The International Standard Atmosphere (ISA) Mustafa Cavcar* Anadolu University, 26470 Eskisehir, Turkey Nomenclature a = speed of sound, m/sec g = acceleration of gravity, m/sec2 h = altitude, m or ft p = pressure, N/m2 or hPa R = real gas constant for air, 287.04 m2/°Ksec2 T = temperature, °K or °C ρ = density, kg/m3 Subscripts 0 = standard sea level conditions 11 = tropopause caonditions Abbreviations ICAO = International

Similar Papers

The Fiat Money System Essay

1762 words - 8 pages countries tried to cash in their pounds and dollars for gold. A run to convert pounds to gold collapsed the pound. That run on gold forced the end of the gold exchange standard. So began the end of the Bretton Woods Agreement. [5]In 1963 New Federal Reserve notes with no promise to pay in "lawful money" was released. No guarantees, no value.The Bretton Woods system of monetary management established the rules for commercial and financial relations

Financial Regulators Of Australia And All About Interest Rates

513 words - 3 pages ). It is also a banker in the sense that it is used to buy/sell govt. securities to financial institutions, known as open market operations. Holds reserve of foreign currency/gold - used to make international payments and in the FOREX market Government banker and economic advisor for the government - govt. lodges excess funds and obtains funds (through treasury bills) in RBA and raises short term and long term loans (pays interest on

Role Of Reserve Bank Of Australia And Interest Rates

2010 words - 9 pages expectations - higher interest rates encourage lower expectations of inflation in the futureEg: Despite the small size of the increase, the impact on the economy was considerable. Almost immediately the standard variable home loan interest rate rose to 7.32%, increasing monthly repayments on an average mortgage of $250,000 by $40.18.Evaluation of Monetary PolicyThe floating of the exchange rate in 1983 allowed the RBA to have greater control over

Lords Of Finance Essay

314 words - 2 pages made the decision to return to the gold standard, at the wrong time and the wrong rate, which led the whole world entered into a long period of depression. However, even though gold standard doesn't exist anymore in U.S. I think returning to gold standard can help preventing further depression if we set up some new policy. The financial crisis that began in 2007 would never have happened if the Federal Reserve kept the value of the dollar stable