Exchange Rate Analysis
The author of this report is to follow the order of Dorchester Inc. And analyze the exchange rates for three different countries. The author will use the United States Dollar (USD) as the common currency and then compare/contrast the exchange rates of the dollar against the Euro, the Yen and the Australian Dollar. All three will be looked at over the last five years using the Bloomberg website. While one would expect these three charts to be at least somewhat similar, they are actually quite different and no two of the three are remotely alike.
The USD/YEN rate, which compares the currencies of Japan and the United States, shows some very sharp activity over the recent years. Of course, 2010 marked a year where the United States and much of the rest of the world was in a sharp recession. While the worst was from late 2007 to 2009, there were also some bad times during 2010, 2011 and 2012. In some areas, the misery continues. Japan is not on the verge of collapsing but they have a very high amount of debt relative to their gross domestic product. Perhaps those facts and others lead to conclusions that can be made about currency exchange rates. This time in 2010, the rate was 90 yen to each dollar. The number bounced around ab it for about a year and then started trailing sharply downward until it bottomed out at about...
It stayed there and then spiked up in April and May of 2012 and then fell a bit but not to the point that the gains were cancelled out. After that, starting in late 2012, the yen rate against the dollar spoke sharply upward and this rise kept doing almost completely unabated until May 2013. There was some sharp up and downs just after that and this lasted through September 2013. However, the rate then rose to its second-most recent peak at 105 in January 2014 and it then bottomed out just about 100 for a few months. In the last few weeks, it has spiked up to 110 yen for each dollar. Indeed, that is the highest exchange rates the yen has had over the last five years. Indeed, there was no time from January 2010 to May 2013 that the yen was more than 100 yen to each dollar. However, it's been there for more than a year and is currently still on a sharp upswing. In addition to the items mentioned before, Japan has a very strong consumer electronics and automotive industry and they seem to be past the problems that were caused by the earthquake and tsunami. The latter, is likely what caused the value from May 2010 to January 2013, at least most of it considering it happened in 2011 (Bloomberg, 2014).
The Australian dollar is a bit different. Rather than starting in the basement five years ago and moving up, their rate against the U.S. dollar…
