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Currency and Country Risk Analysis

Assignment Worksheet

1. For your chosen country identify its currency’s name and trading symbol below:

Country	Currency	Trading Symbol*
Example: United States	Example: U.S. dollar	Example: USD

Research the exchange rate over the past 12 months between the U.S. dollar and the currency you have chosen above and complete the tables below.

Currency

Today’s Date Today’s Spot Exchange Rate in American terms, i.e., USD per one unit of foreign currency Today’s Spot Exchange Rate in European terms, i.e., one unit of foreign currency per USD   
       

In completing the table below express your answers in EITHER American or European terms:

Today’s Exchange Rate

 
  Exchange Rate One Year Ago  
  Percentage Change over Past Year  
  52-Week High in Past Year  
 

2. For your selected country provide the following data:

	2012	2013	2014	2015
Balance of Trade
Current account balances
Portfolio investments
Foreign direct investment
Official monetary reserves

Be sure to identify the units of currency in which the data is expressed and whether ‘000 or more digits are omitted.

3. Identify the currency’s classification according to the IMF’s table of Exchange Rate Arrangements.

At this site in Table 2 on pages 5-7 find the exchange rate arrangement on the left (1 of the 10 listed, ranging from “No Separate Legal Tender” for 13 countries to “Free Floating” for 29 countries) associated with the country whose currency you’ve chosen.

Currency Chosen	Exchange  Rate Arrangement

4. Consider the data above and your prior analyses on your chosen country and answer the following questions:
i. How would you assess the economy’s performance in the recent past?
ii. What are the likely effects on the currency short-term (over the next year) of the trends in the macroeconomic data?
iii. Would you invest in the economy in the short-term (over the next year) and/or medium term (over the next three years)? Explain.

Attachment:- Currency analysis guidlines.rar