International Marketing 118. 330 Slides

Foreign Exchange

• Function and Nature of Foreign Exchange Markets
• Transactions-- Currency Needs Credit
• Hedging -- Interest arbitrage Swaps
• Speculation
• Monetary Institutions
• Commercial Banks
• Central Banks
• Money Markets
• Bond and Equity Markets

Foreign Exchange

• Foreign Exchange
• Factors Affecting Demand
• Factors Affecting Supply

Quantity
Supply (Exports)
Demand (Imports)
Dollar
De
Qe
Df
Qf

International Trade and Foreign Exchange

• Demand and Supply of Foreign and Local Currancies
• Relationship to Terms of Trade
• Product Price (in Canadian Dollars) / Product Price (in Yen)
• Factors that Impact upon Volume of Trade
• Internal Efficiencies
• Financial Strength of Nations Currency and Credit
• Dynamic Innovativeness

Balance of Payments

• Relationship between flows of financial assets within a country over a year’s period.
• Current Account
• Exports and Imports
• Unilateral Transfers
• Net Trade Balance
• Net Capital Account Balance
• Capital Account
• Portfolio Investment
• Foreign Direct Investment
• Net Capital Account Balance
• Official Reserve Account
• Stock of Foreign Currencies
• Gold and other precious metals
• Bank IOUs etc.

Balance of Payments

• Relationship Between Balance of Trade and Balance of Payments
• Relationship Between Balance of Trade and Exchange Rates
• Relationship Between Interest Rates and Capital Account
• Government’s Role in Affecting Trade, Exchange Rates, and Balance of Payments