CURRENCY INVESTMENT OPTIONS

Nefferitti Dieng, MBA

CURRENCY• Major Economies (Determine Currency Value)

– United States, Eurozone, Japan, United Kingdom, Switzerland, Canada, Australia, and New Zealand

• Yield drives return– Purchasing in pairs (ie. EUR/USD – 1.3500 means $1.35 to

purchase one Euro)• Interest Rates and Volatility

– Basis points rises causes appreciation– Volatility earns capital gains as currency rallies

Basics

DISCUSSION

Foreign Currency Basics

Impacting Concepts

Trading Markets

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• US Dollar – USD– 1.23063

• Japanese Yen – JPY– 97.04

• Chinese Yuan Renminbi – CNY– 7.79245

• Iraqi Dinar – IQD– 1,4299.99

• USD/EUR* *US Dollar to Euro

– 0.81252

EXCHANGE RATESEURO Base

• Historical – 1 year ago– EUR/USD

• 1.4244 • In the past year, the Euro has inflated approximately .19377 or

13.60% paired against the US Dollar – EUR rallied. • Several factors caused Euro to inflate, which include:

– Governmental policies through changes in prices and indirect taxes– Euro cash carryover rate on consumer price are different across countries in Eurozone– Structural differences in Eurozone (ie. Energy – oil dependency/prices and Agriculture)– Exchange rates on domestic prices, wages, labor, and international trade

EXCHANGE RATES…EURO Base

REFERENCES• http://finance.yahoo.com/education/currencies/article/106062/Basic_concepts_for_currencies_markets

• http://www.oanda.com/currency/converter/

• http://www.ecb.int/pub/pdf/other/inflationdifferentialreporten.pdf