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The role of currency markets

Élodie Oulevey , Nadine Mülhauser. The role of currency markets. Currency markets. World’s largest financial market 3 important functions : Transfer of purchasing power Provision of credit Provision of hedging ( protection ) facilities. Currency War. New trend : low currency

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The role of currency markets

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  1. Élodie Oulevey, Nadine Mülhauser The roleofcurrencymarkets

  2. Currency markets • World’slargestfinancialmarket • 3 importantfunctions: • Transfer ofpurchasing power • Provision ofcredit • Provision ofhedging (protection) facilities

  3. Currency War • New trend: lowcurrency • Definiton: countries compete against each other to achieve a relatively low exchange rate for their own currency • PresidentalDebateofOct. 16, 2012 • Romney accuses China tobe a currencymanipulator

  4. Is China a currencymanipulator? • Topic in presidentialdebates • Romney wantstoput in placetariffs • Economistspointofview • China mightwanttoavoidpoliticalreactions

  5. Conclusion • Currency plays a high role • Influencesthestandardofliving • Influences Export/Import Markets • A singlecountryinfluencesothers

  6. Sources • http://www.economist.com/node/21564210 • http://en.wikipedia.org/wiki/Currency_war • http://www.economist.com/blogs/freeexchange/2012/10/economics-and-election • http://www.nytimes.com/2012/10/18/world/asia/chinas-renminbi-has-strengthened-during-obamas-term.html?ref=business&_r=0&pagewanted=print

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