Description
Global Foreign Exchange Market Analysis
Conduct a comprehensive analysis of the global foreign exchange market, addressing the following points:
1. Describe the structure and key participants of the foreign exchange market, including banks, dealers, and non-bank intermediaries. How has the market evolved over the past two decades?
2. Explain the concept of market equilibrium in the foreign exchange market using supply and demand curves. Illustrate how changes in factors such as GDP, imports, exports, and market expectations can shift these curves and affect exchange rates.
3. Compare and contrast the determinants of exchange rates in the short, medium, and long term. Consider factors such as interest rates, inflation, economic growth, and political stability.
4. Analyze the role of algorithmic trading and high-frequency trading firms in modern foreign exchange markets. How have these technological advancements impacted market liquidity and price discovery?
5. Evaluate the effectiveness of different exchange rate regimes (flexible, fixed, and crawling peg) in managing currency fluctuations and promoting economic stability. Use examples from specific countries to support your analysis.
6. Discuss the concept of purchasing power parity and its importance in understanding long-term exchange rate movements. How does arbitrage contribute to maintaining relative currency values across markets?
Directions:
• Your essay is required to be five to six pages in length, which does not include the title page and reference pages, which are never a part of the content minimum requirements.
• Support your submission with course material concepts, principles, and theories from the textbook and at least three scholarly, peer-reviewed journal articles. Use the Saudi Digital Library to find your resources.
• Use Saudi Electronic University academic writing standards and follow APA style guidelines.
• It is strongly encouraged that you submit all assignments into Turnitin prior to submitting them to your instructor for grading. If you are unsure how to submit an assignment into the Originality Check tool, review the Turnitin – Student Guide for step-by-step instructions.
Review the grading rubric to see how you will be graded for this assignment.
Conduct a comprehensive analysis of the global foreign exchange market, addressing the following
points:
1. Describe the structure and key participants of the foreign exchange market, including banks,
dealers, and non-bank intermediaries. How has the market evolved over the past two
decades?
2. Explain the concept of market equilibrium in the foreign exchange market using supply and
demand curves. Illustrate how changes in factors such as GDP, imports, exports, and market
expectations can shift these curves and affect exchange rates.
3. Compare and contrast the determinants of exchange rates in the short, medium, and long
term. Consider factors such as interest rates, inflation, economic growth, and political
stability.
4. Analyze the role of algorithmic trading and high-frequency trading firms in modern foreign
exchange markets. How have these technological advancements impacted market liquidity
and price discovery?
5. Evaluate the effectiveness of different exchange rate regimes (flexible, fixed, and crawling
peg) in managing currency fluctuations and promoting economic stability. Use examples
from specific countries to support your analysis.
6. Discuss the concept of purchasing power parity and its importance in understanding longterm exchange rate movements. How does arbitrage contribute to maintaining relative
currency values across markets?
Directions:
•
Your essay is required to be five to six pages in length, which does not include the title page
and reference pages, which are never a part of the content minimum requirements.
•
Support your submission with course material concepts, principles, and theories from the
textbook and at least three scholarly, peer-reviewed journal articles. Use the Saudi Digital
Library to find your resources.
•
Use Saudi Electronic University academic writing standards and follow APA style guidelines.
•
It is strongly encouraged that you submit all assignments into Turnitin prior to submitting
them to your instructor for grading. If you are unsure how to submit an assignment into the
Originality Check tool, review the Turnitin – Student Guide for step-by-step instructions.
Review the grading rubric to see how you will be graded for this assignment.
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