(国际经济学教材）ch13 Exchange Rates and the Foreign Exchange Market_1.pptVIP

Chapter 13 Exchange Rates and the Foreign Exchange Market: An Asset Approach 2 1.Exchange Rates and International Transactions (1) Exchange rate Conception: The price of one currency in terms of another Two kinds quotations Direct quotation: The price of the foreign currency in terms of dollars Indirect quotation: The price of dollars in terms of the foreign currency 3 Two changes in exchange rate Appreciation Depreciation ＄ 1.50 per pound ＄ 1.25 per pound pound: depreciation dollar:appreciation ＄ 1.50 per pound ＄ 1.75 per pound pound: appreciation dollar: depreciation 4 For example: to buy a sweater costing 50 British pounds, how many dollar? (＄ 1.50 /￡) × (￡50)= ＄75 (＄ 1.25 /￡) × (￡50)= ＄62.50 (＄ 1.75 /￡) × (￡50)= ＄87.50 Conclusion: When a country’s currency depreciates, foreigners find that its exports are cheaper and domestic residents find that imports from abroad are more expensive. An appreciation has opposite effects. 5 Import and export demands are influenced by relative prices. Exchange Rates and Relative Prices 8 The worldwide volume of foreign exchange trading is enormous New technologies, such as Internet links, are used among the major foreign exchange trading centers (London, New York, Tokyo, Frankfurt, and Singapore). The integration of financial centers implies that there can be no significant arbitrage. Mostly involving vehicle currency, US$ (2)Characteristics of the Market 9 Relating with Spot Rates and Forward Rates (3)The Transactions of Foreign Exchange Market Spot exchange rates Apply to exchange currencies “on the spot” Forward exchange rates Apply to exchange currencies on some future date at a prenegotiated exchange rate Forward and spot exchange rates, while not necessarily equal, do move closely together. 10 Dollar/Pound Spot and Forward Exchange Rates 1981-2001 Forward and spot exchange rates, while not necessarily equal, do mov