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Economy Assignment - Essay Example
Pages 21 (5271 words)
Answer: As we can see from the Table 1 of the group work the value of Sterling over the period of 2000-2003 have not only shown fluctuations on the long term changes but the changes were noticeable on the quarterly basis as well. During 2000 there was a sharp decline in the value of the Sterling against the Japenese Yen…
We know that exchange rate is influenced by the demand of the particular currency. Sterling exchange rate against Yen has shown significant growth in the first quarter of year 2002. It indicates that the demand of the Sterling have grown against Yen. In the year 2003 Yen have appreciated against Sterling. In reviewing the exchange rate on a broader base than quarterly it is evident that although although 2000 was a year of decline for the Sterling against the Yen, there was a remarkable jumps in the first quarter of 2001 which saw the quarter ending at the same rate per se as the first quarter of 2000 (the quarter in which we began the analysis.) In total for year 2001 the Sterling saw no depreciation against the Yen. After its approximate 12 point jump between the 4th quarter of 2000 and the 1st quarter of 2001, the remainder of the year saw slight growth. Then although not as dramatic as was the 10 point leap between 4th quarter of 2001 and the 1st quarter of 2002. During 2002 saw the first depreciation in the Sterling of approximately 4 points in quarter 2 where it remained constant through the 3rd quarter. Again in between quarter 3 of 2002 and the 4th quarter of 2002 the Sterling gained almost 8 points before dropping slightly in the 1st quarter of 2003 only to moderate in the 2nd quarter and then steadily decline through the end of the quarter. ...
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