Dollar system
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4 pages
«We must get ready for a weak dollar world»Introduction Article & Analysis Key Terms
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The Dollar System
• 1879-1914: Gold standard system
• 1944-1971: Bretton Woods Agreement
$35/Ounce
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• 1971-Now: Floating exchange system
Introduction
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Article & analysis
• 2 major effects of last financial crisis • Budget deficit + debt increased in the U.S. • Emerging markets will grow faster than the others
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Introduction
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Article & analysis
• Weakening of U.S. dollar is sad, but inevitable • The role of dollar in the markets – is there a need for new currency? • New monetary policy
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Introduction Article & Analysis
Currency
• Generally accepted form of money • Basis for trade • Investors often trade currency on the foreign exchange market
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Introduction
Article & Analysis Country
Eurozone
Currency
Currency
Euro (€) USD dollar ($) Yen (¥) Pounds (£) Swiss Franc (CHF) Australian Dollar (AUD) Renminbi
United States of America
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Japan United Kingdom Switzerland Australia China
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http://finance.yahoo.com/currency-converter
Introduction Article & Analysis
Currency
Eurozone
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Introduction Article & Analysis
Forex - FX
• market in which currencies are traded • It’s the largest, most liquid market in the world • Includes all of the currencies in the world
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Introduction
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Currency Risk
• Risk that arises from the change in price of one currency against another • Example: US investor with stocks in Canada • Return comes from: - change in price of