Got a tricky question? Receive an answer from students like you! Try us!

The Dollar-Pound Exchange Rate - Essay Example

Only on StudentShare
Author : kassulkekeaton


The dollar pound exchange rates have been pretty mobile and have affected the investors and the traders drastically since the pre-second world war years. During the major shake up in the 1930s, a number of traders lost their money when there was a sudden market depression which led to a crashing pound against dollar…

Extract of sample
The Dollar-Pound Exchange Rate

This coupled with the devaluation of the pound sterling, in a bid to reduce the domestic credit in UK, brought down the exchange rates against pound sterling. But there was always an opinion and not wrongly, that the market was predominantly controlled during those days by speculators which was possibly the single largest reason to work against the interests of pound sterling.
Though this was the scene in September 1931, the scene has not undergone drastic changes in terms of operational methods. The number of players in the market, speculators, traders and the countries interacting with one another has all increased. But then the basic working of the market remains more or less similar to the pre-war condition in the case that it is controlled by the speculators of the market to a great degree. The market has been set aside as Futures for the speculators. But then the futures carry a very special impact on the over all exchange rates of the currencies on the bourse. The aim of this research is to study the impact of the futures market on the currency exchange rate across the counter.
The objective of the research is to identify a relationship either empirical or otherwise between the futures market and that of the spot business after passage of a specific time. ...
Download paper

Related Essays

Managing Interest Rate and Exchange Rate Volatility
Her interest payments will therefore be fixed while interest receipts will be variable and will depend on prevailing rates. She will therefore be facing basis risk since her interest expenses and revenues will be determined on different basis.…
10 pages (2510 words)
International Currency
However, it is not secret that dozens of countries all over the world including Great Britain define the value of their currencies through a fixed exchange rate with the dollar. Many others, especially in Asia, keep their currencies tightly linked to the U.S. currency (Altman, 2004)…
20 pages (5020 words)
Managing Interest Rate and Exchange Rate Volatility Assignment
Buckley (1996) identifies two other types of interest rate risk, which include basis risk and Gap risk.…
12 pages (3012 words)
Exchange Rate Regimes
Consequently, exchange rates are very sensitive to the receipt of new information (Swan, 1993, p 67-69).…
10 pages (2510 words)
Dissertation: The Dollar-Pound Exchange Rate
The reasons for these two different brands of capitalism did not deter the two nations in forging important symbiotic economic, trade and political ties and be reckoned as one of the most effective socio-political and economic alignment of the present day world. The two different brands of capitalism ,followed by these two nations, were founded in the realities of these two nations-the UK was a small nation that had limited natural resources at its command and the USA was a vast land with a population that was not sufficient to exploit such large and rich natural resources. Thus, while the UK…
72 pages (18072 words)