Questions tagged [exchange-rates]
the price at which one currency may be exchanged for another.
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Purchasing power parity and triangular arbitrage
Does no arbitrage in the FX market have any implications for purchasing power parity (PPP) tests? To be more specific, suppose you have currencies A, B and C and you can form three currency pairs (...
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Good practice in time series tests with different start/end dates
I am testing purchasing power parity on monthly data, in a sample of about 70 to 200 countries depending on which price index / currency pair is used. Would it be considered bad practice to use ...
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Spillovers as test of purchasing power parity
Transformed coefficients of a vector autoregressive model (VAR) with up to p lags or VAR(p) yield impulse responses that can be used to produce forecast error variance decompositions, or spillovers, ...
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Why did Newton choose to devalue silve with respect to gold and (effectively) create the gold standard?
This is a question of economic history, specifically about one specific event that caused the British to adopt the gold standard.
Reading about the gold standard one often encounters statements like ...
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Exchange rate and Inflation: Conclusions
The value of $100 in 2000 in German Currency increased to $155.82 due to inflation (refer: Value of 2000 Euro (Germany) today - ...
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Internationalization of Chinese Yuan, and Chinese exports?
If Chinese Yuan is internationalised and more countries use it to settle payments, then wouldn't that cause strengthening of Chinese Yuan and make Chinese exports uncompetetive ?
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Why does this example illustrating the effect of growth on exchange rates not work?
I'm looking for a (very) elementary explanation for why economic growth leads to one's currency becoming more valuable. This certainly seems like it should happen (example: "An economy ...
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How is the PBOC exchange reference rate set in China?
For instance, say the PBOC decides that they will set the rate at $1=7CNY. Is it just an announcement by the PBOC whereby now all Chinese banks/financial institutions have to follow this fixed ...
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difference between "crawling like arrangement" and "stabilized arrangement"
What is the difference between "crawling like arrangement" and "stabilized arrangement" ?
what about margins ? both less than + or -1% ?
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Why people buy foreign bonds when foreign interest rate raises?
I'm reading Investopedia's How National Interest Rates Affect Currency Values and Exchange Rates to understand how interest rates affect exchange rates.
It says:
Generally, higher interest rates ...
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Why was the USD rangebound between 1987 and 1995 from an economic standpoint?
I'm trying to understand what caused this long period of range boundedness for the USD index from 1987-1995 from an economic standpoint.
From my understanding. In 1985 the USD had reached it's ...
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interest rate and exchange rate- economic concept
Does UIP say that key interest rates have an impact on the exchange rate? Are maybe other economic concepts? Can somebody recommend me literature? On the Internet, I found that from the Mundell ...
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Persistency on Exchange Rates
Assume that, the exchange rate between US dollar and UK pound has been increasing without any deviation. Do we observe the same phenomenon as with the case of accelerationist phillips curve where ...
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Large quantity sale of CNY at current currency value
Some company wants to sell large quantity of CNY and buy USD on Forex. Let current currency value is 1 CNY = 0.14 USD at the time moment on Forex. When company sell large quantity of CNY, money supply ...
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How to explain negative correlation betwen FED funds rate and dollar volatility?
actually I am looking into monthly price data on bitcoin and the us-dollar (USD/EUR) and the monthly federal funds rate.
I calculated the volatility by:
...
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How to prove that an increase in the money supply leads to devaluation of the currency?
In one article I've read that increase in the money supply leads to inflation and exchange rate change.
For example, if we have double increase in the money supply then we'll have double change in ...
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Short-selling domestic currency to hedge against inflation
A person lives in a country with a high risk of inflation. She just started working, so she has little savings. Her goal is to ensure that her future income does not lose value because of inflation. ...
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Why there is no study on the forecasting methods for the exchange rates of CBDCs? What do you think?
What do you think about the predictiion/forecasting the exchange rate of CBDCs?
(CBDC= CENTRAL BANK DIGITAL CURRENCY)
I cannot find any paper on this issue in the literature. But, there are some ...
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How does one get FIM exchange rates prior to 1999?
I have long known of and used the data from: https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/index.en.html
But it only goes back to February 1999. FIM (...
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Why is the US dollar not depreciated after the US printing more money than usual?
I heard even when the US was printing more money (Quantitative Easing), with US dollar the main transaction currency of the world, the whole world has to pay the price of the US dollar depreciating.
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How do changes in US government bond yields impact the USD exchange rate?
I would like to understand how changes in US government yields impact the USD exchange against other major currencies, eg. the Canadian dollar or the yen.
My question assumes that the bond yields ...
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How can Japan have much lower inflation compared to US when Yen is much weaker compared to USD than 1 year ago?
I understand that Japanese people might not buy same stuff that US people buy, that inflation might be calculated differently, that people in Japan can buy services/products made inside Japan... and ...
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What does THO, as in "USD THO", stand for in export statistics?
I've noticed that some online sources use "USD THO" as a unit to express rates of transfer of value. Specifically, I saw it in measuring Chinese exports to Russia in this video at 21:20 ...
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How can the exchange rate be virtually constant with major inflation rate difference and a widening trade deficit?
I have recently had a discussion with a colleague about what seems to be a rather strange macroeconomic aspect in Romania (which has RON currency):
EUR-RON exchange rate has been virtually a flat ...
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Where does the euro/dollar rate data prior to 2002 come from?
The Euro was created in 1999 and introduced in 2002. But if you search for the euro/dollar rate data there is a rate value back to Aug 1983.
Where does this data come from?
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Mistake in Wikipedia article on Fixed exchange rate system?
I think there is a mistake in the following Wikipedia-article:
https://en.wikipedia.org/wiki/Fixed_exchange_rate_system
at figure 2 and 3.
I think the ECB has to BUY (not sell) the dollars as in point ...
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Why does a stronger US dollar translate to potentially lower sales and earning for Microsoft?
A recent headline stated:
"Microsoft Corp. cut sales and earnings guidance for the fourth
quarter, citing unfavorable foreign exchange rates as the stronger
U.S. dollar takes a toll."
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Currency vs purchasing power?
When I search the internet about which is the strongest currency, the answer is the currency which buys more from other currencies. For example if 1 euro can buy 10 dollars then euro is a stronger ...
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Why did the Iranian Rial peak suddenly on 1 August 2014?
Search Iranian Rial and click on Max above the chart.
Iranian Rial to Pound Sterling:
Why did the Iranian Rial peak suddenly on August 1st 2014?
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Does Russian Ruble strengthening mean the sanctions did not hurt Russian economy?
After imposing the sanctions to Russia, 1 USD skyrocketed to 139 Rubles, but now it is back to the pre-war exchange rate. Moreover, it kept decreasing almost every day recently. Does this mean that ...
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How does US inflation impact dollarized nations?
For instance, would a high inflation rate on the US have any impact on countries that use the US dollar as their only legal tender, eg Ecuador or El Salvador?
I often hear that high US inflation will ...
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What are the reasons for Russian Ruble to strengthen in the past few days?
1 USD was about 75 Russian Rubles before the war in Ukraine began. After the sanctions, Russian Ruble quickly declined and 1 USD skyrocketed to 139 Rubles. Now it is back to around 85. What are the ...
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Did Russia's GDP per capita really fall 38% between 2013 and 2020?
GPD per capita usually goes up over time due to improvements in technology, but Russia's fell dramatically from \$16,000 to \$10,000 in the 7 years from 20131.
There was little change in Russia's ...
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Why doesn't Ukrainian currency suffer from the war?
The value of the Hryvnia, has hardly been affected by the Russian invasion of Ukraine on 21 february.
https://www.google.com/search?channel=fs&client=ubuntu&q=hryvnia+to+euro
I can think of ...
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Why does Russian ruble conversion rate to USD remains constant at 1 to 0.01?
I've been noticing that since Russian ruble started losing its value compared to other foreign currency, at some point it became at constant exchange rate of 1 RUB to 0.01 USD.
That is, every day no ...
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How to make sense of Lebanese currency values in USD with a PPP conversion factor?
For example, I have data from a survey of adult citizens in 2014 showing an average annual salary of about 20000 LCU. I would like to find a comparable measure of the standard of living in Lebanon ...
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What does the price of bitcoin per ounce of gold tell us?
For example, see the below graph from https://charts.woobull.com/bitcoin-vs-gold/
It seems that intention is to isolate the effect of US dollar when assessing bitcoin's value, e.g. BTC quoted in US ...
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Monetary sterilization’s working is wrong?
Say, there is an increase in demand for dollars (as compared to the other currency, say yen), which will put appreciation pressures on dollar.
Then to counter this appreciation, we need to buy yen. ...
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Does countries for which exchange rate is falling become cheaper
Is it a good idea to visit those countries whose currency is falling? (As in exchange rate). In another words does the items there become cheaper if I could now get more money in there currency for ...
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Is there any situations where real exchange rate positively impacts on national imports?
I'm working on a gravity model analysing the factors that affect national imports, and the results showed that the real exchange rate (real exchange rate between local currency and foreign currency) ...
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Relationship between Treasury yield and dollar
I understand it is common sense that treasury yield goes up, the dollar goes up as well due to the fact that domestic/foreign money are attracted to the higher yield therefore they need to buy more US ...
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Why is there such a big difference of purchasing power toward Coca-Cola between Euro in France and USD in USA, comparing to Big-Mac?
I have an assignment that requires me to pick an item and use it to create my own price level index, similar to Big-Mac index.
In March 2021, the price of 0.5 litre Coca-Cola in France was 0.97 Euro ...
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Do exchange rate indicate richness/poorness of a country
Suppose there are two countries, A and B and if 1 unit of currency of A = x units of currency of B
And x>1 does that mean that country A is richer or people are well off there?
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How are the rates between two currencies (fiat and cryptocurrecies) determined? [duplicate]
How are the exchange rate between two countries determined? For example how is exchange rate between the dollar and the euro established?
My guess is it has to do with some form of demand/supply but I ...
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If the BOP is always equal to 0 then why would a trade imbalance cause currencies to fluctuate?
I am a bit confused in interpreting the correlation between a trade deficit/surplus & currency depreciation/appreciation. Considering BOP always equals 0 and a outflow in the current account is ...
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What are the main causes of disparity between nominal and PPP exchange rates?
(I'm not a student of economics and I have no idea about correct terminology and things. )
I've seen the acronym "PPP" in various places for a long time, but it's only recently I became ...
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Effect of import quota on NCO, NX
I'm studying loanable funds from the book "Brief Principles of Macroeconomics, 6th ed". On page 307, the effects of an import quota are explained below. It said the net export rises, but NCO ...
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The impact of a devaluation of the national currency under a fixed exchange rate system
I would really be thankful if any of you could check my answer to the following question.
Question:
Describe, using the IS-LM-BP model, the impact of a devaluation of the national currency under a ...
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Shifts in IS in a fixed exchange rate mechanism
First, we assume we are in a fixed exchange rate mechanism. In this system, I deduce that the expected exchange rate would be fixed, at the market rate.
In a floating system, with open capital markets,...
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Why would foreign asset purchases by PBOC temper yuan appreciation?
Suppose the PBOC buys a bunch of dollar-denominated bonds, using its dollar reserves. All else equal, what effect should this have on the yuan-USD exchange rate? And why? It amounts to trading non-...
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