Foreign Currency Exchange
BUS 100
Business Assignment #1
Foreign Currency Exchange
The foreign exchange rate is extremely significant in everyday life, even if you may not understand how or experience first hand. How much you give up of one currency to obtain another unit of currency is called the foreign exchange rate. Chapter 3, exporting global business, shows how important exporting and importing goods from around the world is and how it rely’s on the foreign currency exchange. A countries currency can be considered strong or weak and directly affect prices of imports and exports affecting consumers all over the world. When an exchange rate is considered weak, that may cue an economic recession versus when an exchange rate is considered strong, showing a countries rising economy. If a country imports more then they export, they have what they call a trade deficit. In part 1 of chapter 3, Daniel T. Griswold, associate director of the Center for Trade Policy at the Cato Institute stated, “The trade deficit is not a sign of economic distress, but rising domestic demand and investment. Imposing new trade barriers will only make Americans worse off while leaving the trade deficit virtually unchanged”. It is important for businesses to understand how to convert one currency to another and know the up to date foreign exchange rate. Because shifting exchange rates affect costs of imported and exported goods and services, it can directly affect the profitability of a business. There are many websites available on the internet to help anyone with converting currency. One must first find out the up to date foreign exchange rate on sites such as usforex.com or x-trade.com. Many foreign exchange rates are constantly changing and determined by the market forces of supply and demand. Some countries use a held exchange rate that is set by the government and does not fluctuate day to day. Chapter 3 also explains that nations can increase or decrease the value of its money, called currency
Business Assignment #1
Foreign Currency Exchange
The foreign exchange rate is extremely significant in everyday life, even if you may not understand how or experience first hand. How much you give up of one currency to obtain another unit of currency is called the foreign exchange rate. Chapter 3, exporting global business, shows how important exporting and importing goods from around the world is and how it rely’s on the foreign currency exchange. A countries currency can be considered strong or weak and directly affect prices of imports and exports affecting consumers all over the world. When an exchange rate is considered weak, that may cue an economic recession versus when an exchange rate is considered strong, showing a countries rising economy. If a country imports more then they export, they have what they call a trade deficit. In part 1 of chapter 3, Daniel T. Griswold, associate director of the Center for Trade Policy at the Cato Institute stated, “The trade deficit is not a sign of economic distress, but rising domestic demand and investment. Imposing new trade barriers will only make Americans worse off while leaving the trade deficit virtually unchanged”. It is important for businesses to understand how to convert one currency to another and know the up to date foreign exchange rate. Because shifting exchange rates affect costs of imported and exported goods and services, it can directly affect the profitability of a business. There are many websites available on the internet to help anyone with converting currency. One must first find out the up to date foreign exchange rate on sites such as usforex.com or x-trade.com. Many foreign exchange rates are constantly changing and determined by the market forces of supply and demand. Some countries use a held exchange rate that is set by the government and does not fluctuate day to day. Chapter 3 also explains that nations can increase or decrease the value of its money, called currency
Cited: “Payroll”. Newsroom.infinisource.com. February 19, 2013. June 16, 2013. “International Payroll”. Fttglobal.com. June 16, 2013. Strauss, Phoebe. “How to Convert Pesos to Dollars”. ehow.com. June 16, 2013.