Exam 15: Foreign Exchange: The Structure and Operation of the Fx Market

If the Australian central bank wished to cause the AUD to appreciate,it would _______ AUD and _______ foreign currency.

Currently,the largest FX centre is in:

Discuss briefly why a central bank might enter the FX markets.

The holding of foreign currency in the hope of a future sale is called a/an:

It is Tuesday,27 March 201X,and an Australian importing company has to pay a US exporter USD 75 000 within the next six weeks.The company enters into a forward exchange contract with an FX dealer for 'one month forward delivery' of USD.On what date will value settlement occur?

The convention in the FX markets is that the second-named currency in a FX quote that is used to express the value is:

In the FX markets a forward transaction refers to the:

An importer will be required to purchase USD in approximately six months to pay for a consignment of goods.The company is concerned that the AUD may depreciate before the due date and therefore decides to enter into a forward exchange contract to protect its position.The company receives the following quote: 'the Aussie is fifty-eight forty-five to fifty-three,sixty-two to sixty six'.Calculate the forward exchange rate.