Unit I Assessment

1. Unit I Assessment
UNIVERSIDAD TECNICA DE MACHALA
FACULTAD DE CIENCIAS EMPRESARIALES
INTERNATIONAL TRADE CAREER
BUSINESS ENGLISH II
QUINTO A NOCTURNA
Lic. Pizarro Romero Johanna Micaela,
Mgs.
Name: Vasquez Valverde Karen

2. 1. What is Currency?
Currency is a widely accepted medium of
exchange in commercial and financial
transactions that facilitates trade and
economic activity. Historically, it has taken
various forms, from physical objects such as
shells, precious metals and stones, to digital
representations in the contemporary era.

3. Types of currencies in
the Forex
In the Forex market (foreign exchange market), currencies are traded in
pairs, and each pair is made up of two different currencies. These
currencies are divided into three main categories:
United States dollar (USD): It is the reference
currency in the Forex market and is found in
most currency pairs.
Euro (EUR): Currency of the euro zone.
Japanese Yen (JPY): Currency of Japan.
Pound Sterling (GBP): Currency of the United
Kingdom.
Australian Dollar (AUD): Currency of Australia.
New Zealand Dollar (NZD): Currency of New
Zealand.
Swiss franc (CHF): Currency of Switzerland.

4. Characteristics of the most
important currencies in the Forex
Knowing the characteristics of the main world currencies is extremely
useful and understanding their properties and qualities is very helpful
when executing an operation.
US Dollar (USD):
World Reserve Currency: The dollar is
the world's primary reserve currency
and is widely used in international
transactions.
Relationship to the US Economy:
Economic and political trends in the
United States have a significant impact
on the value of the dollar.

5. Euro (EUR):
Single Currency in the Eurozone: The
euro is the official currency of the
Eurozone, which includes several
countries in the European Union.
Economic Importance: The economic
health of the Eurozone influences the
value of the euro
Japanese yen (JPY):
Safe Haven: In times of uncertainty,
investors often seek refuge in the
Japanese yen.
Relationship to the Japanese Economy:
Economic conditions in Japan affect the
strength of the yen.

6. Libra esterlina (GBP):
British Pound (GBP):
It is the oldest currency in the world.
It is the third most used currency by countries in
terms of international reserves.
It is the fourth most traded currency in the world
on the markets, behind the euro, the dollar and
the yen.
Canadian dollar (CAD):
Relationship to Natural Resources: The Canadian
dollar is often tied to the prices of commodities,
such as oil, due to the importance of these
resources in the Canadian economy.
Trade with the United States: The trade
relationship with the United States also
influences the value of the Canadian dollar.

7. Australian dollar (AUD):
Natural Resource Dependence: Similar to the
Canadian dollar, the Australian dollar is
influenced by commodity prices, especially
those related to mining and agriculture.
Links to the Chinese Economy: The Australian
economy is closely linked to China, and Chinese
economic events can affect the Australian dollar.

8. Currency trading/conversion
2 CAD=1,47 USD
(Canadien Dollar to US
Dollar)
1 USD=0.88EUR( USS
Dollar tO Euro
CHF =1.08 USD (Swiss Franc
to US Dollar)
1EUR =1,14 USD
(European Euro to US
Dollar)
1KYD =1,20 USD
(Cayman Islands
Dollar to US Dollar)
1GBP =1,36 USD (British
Pound Sterling to US Dollar

9. The future of international currencies
The future of international currencies is a topic that involves various aspects,
including technology, economics and politics. Below are some trends and
developments that could influence the future of international currencies:
Cryptocurrencies and blockchain technology:
Cryptocurrencies, such as Bitcoin and Ethereum,
have gained popularity as alternatives to traditional
currencies.
CBDC (Central Bank Digital Currencies): Several
countries are exploring the possibility of developing
their own central bank-backed digital currencies.
Greater integration of international payment systems:
The demand for faster, more efficient and secure
payment solutions is leading to greater integration of
payment systems globally.

10. 6. Implications for the
internationalization of currencies
The internationalization of currencies has several implications for the global financial
landscape. Here are some key implications:
Diversification of Reserve Currencies: The dominance of a few major currencies, such as the
U.S. dollar and the euro, in global reserves may be challenged. If more countries adopt their
own digital currencies or if cryptocurrencies become widely accepted, it could lead to a
more diversified basket of reserve currencies.
1.
Reduced Dependency on a Single Currency: A more diverse range of international
currencies could reduce the dependency on a single currency for international trade and
transactions. This may mitigate the impact of currency fluctuations and economic policies
of a particular country on the global economy.
2.
Changes in Trade Dynamics: A shift in the international monetary system could influence
trade dynamics. Countries with widely accepted digital currencies or those using alternative
systems may find it easier to engage in cross-border trade, potentially bypassing traditional
currency exchange mechanisms.
3.

11. What's foreign exhange market?
The foreign exchange market (forex, FX (pronounced "fix"), or currency
market) is a global decentralized or over-the-counter (OTC) market for the
trading of currencies. This market determines foreign exchange rates for every
currency.
Foreign exchange markets can be briefly defined as those financial markets in
which any financial instrument related to one or more currencies (and the
following exchange rates between foreign currencies) is exchanged.

12. Characteristics fo the Foreign Exchange Market.
Key features of the foreign exchange market include:
Decentralization: Unlike stock markets, the forex market does not have a physical
location or central exchange. Instead, it operates 24 hours a day, five days a week,
across different financial centers worldwide. Major trading centers include London,
New York, Tokyo, Hong Kong, and others.
1.
Currency Pairs: Currencies are traded in pairs, where one currency is exchanged for
another. Each currency pair consists of a base currency and a quote currency. For
example, in the currency pair EUR/USD, the euro is the base currency, and the U.S.
dollar is the quote currency.
2.
Participants: Participants in the forex market include central banks, commercial banks,
investment banks, hedge funds, multinational corporations, and individual traders.
Central banks play a crucial role in influencing currency values through monetary
policy decisions.
3.
Liquidity: The forex market is highly liquid, meaning that there is a high volume of
trading activity. This liquidity ensures that participants can buy or sell currencies with
minimal impact on the currency's price.
4.

13. Members / Participants
The foreign exchange market has a diverse range of participants, including various
institutions and individuals. Here are the main categories of members or participants in
the forex market:
Central Banks: Central banks are key players in the forex market. They engage in
currency interventions to stabilize or influence the value of their national currencies.
Central banks may also use forex reserves to manage monetary policy and address
economic challenges.
1.
Commercial Banks: Commercial banks play a crucial role in the forex market by
facilitating currency transactions for their clients. They provide liquidity to the market
and engage in currency trading to manage their own exposure and risk.
2.
Investment Banks: Investment banks participate in the forex market to facilitate large-
scale currency transactions for institutional clients, including corporations and hedge
funds. They may also engage in proprietary trading to generate profits.
3.
Hedge Funds: Hedge funds participate in forex trading to speculate on currency
movements and generate returns for their investors.
4.

14. Foreign exchange reserves by country.

15. The most important forex platforms
World Bank: The World Bank also provides economic and financial
data, including information on foreign exchange reserves. Their
databases and reports can be valuable sources for such information.
Central Banks: Individual central banks usually publish data on their
official websites. For example, the Federal Reserve in the United States,
the European Central Bank, the Bank of Japan, and others regularly
release reports on foreign exchange reserves.
National Statistical Agencies: Some countries may provide foreign
exchange reserve data through their national statistical agencies.
These agencies often release economic indicators and financial
statistics.
The forex market operates through various trading platforms, which serve as
interfaces for market participants to execute trades, analyze charts, and manage
their accounts. Here are some of the most important and widely used forex
trading platforms:

16. The most valuable currencies around the
world
Here are some of the historically strong and widely considered valuable currencies:
Kuwaiti Dinar (KWD):
Bahraini Dinar (BHD):
Omani Rial (OMR)
Jordanian Dinar (JOD)
British Pound Sterling (GBP)
Swiss Franc (CHF):
Euro (EUR)
United States Dollar (USD)
Cayman Islands Dollar (KYD):
Singapore Dollar (SGD):

17. Thank you
for your
time