Group items tagged

This article talks about the increase of oil prices due to the price of the dollar being down. This article supports the topic of this week because as the demand of oil increases so do the prices. As the demand for the consumption of a product increases, the price for the product either increases or decreases. Changes in the relative prices of goods (such as oil) occur because of technological change or shifts in supply or demand. Based on this article "The price of oil and gasoline are up because the Federal Reserve has driven the value of the dollar down." - Charles Kadlec

This article talks about the drop in price for the Australian dollar. Glenn Stevens commented on this drop and admits that the volatility of Australia's currency will deter investors. Obviously, volatility means there is the potential for a quick rise in exchange rate as well as a quick fall, but investors want something more secure, something that is steadily increasing, not a moving target.

This article offers a glimpse of recent fluctuations in foreign exchange market. I will narrow my focus down to the USD. If the U.S. Federal Reserve decides to keep up the spending on Treasuries or mortgage-backed securities, this means that the supply of USD on foreign exchange market will be sustained or perhaps even increase. This means that should the demand for USD stay constant, its value will depreciate. However in the end, the expectations of investors concerning the future growth/future path of the exchange make up arguably one the most important share of a currency's movement.

Abbott confused on A$ - and that gift to the RBA Did Prime Minister Tony Abbott's confusion over economics and the strength of the Australian dollar lead him to mislead Parliament last week, and suggest the Reserve Bank had done a deal with the government to lower the value of the dollar?

The strong dollar and increasing competition present a barrier for McDonald's effort to increase its profit. McDonald's used to have inelastic demand, since it did not have much competition and changes in price would not affect total revenue. If they wanted to increase total revenue, they just raised the prices. However, nowadays, as competition takes place, their demand is becoming more and more elastic, because of the more substitutes offered by competition.

The U.S. trade deficit widened slightly in August as exports slipped, suggesting trade will probably not be much of a boost to growth in the third quarter. The import growth is weak and consistent with sluggish domestic demand. So in fact this article is about the goods and services account under the current account. The possible reasons for such trade deficit may be a decrease of foreign demand for US exports, decreased domestic interest rates and speculators' anticipations for the US dollar to rise, which means that there will be a tendency for the price of US dollar to appreciate. This leads to even less competitive exports. If I look at this situation from another perspective, more currency flowed out for imports than it flowed in for exports, creating the debit item and exacerbating the current account.

This article mainly focuses on China's economic growth and its fast approach to what could put it's economy in an equilibrium state."The rate, the spot rate and future rate, determined by the market supply and demand, basically are very close to the equilibrium rate," said Zhou Xiaochuan, governor of the People's Bank of China. He also warns that at this time China is trying to maintain low prices and if external governments begin to have inflation problems this could potentially create problems for China's economy. This comment was a directly linked with China's exchange rate against the US dollar, an issue that has yet to be addressed.

The oil company ExxonMobil announced profits of 36 biollion us dollars, however according to the tax foundation the government had a income on this by 54 billion.

This article talks about ZImbabwe, and the hyperinflation they are experiencing at the moment. The inflation has gone so far that the government currently is owner of an amount of Zimbabwe's currency equal to 217 dollars. The economy in Zimbabwe hit rock bottom around a decade ago, after longtime President Robert Mugabe seized white-owned farms, which prompted international sanctions, damaged investor confidence, damaged tourism, and caused other economic problems.

Although new jobs are created, there is no improvement on the unemployment rate, which remains at 5.4%. However this is a sign of economic improvement in Australia. And the 71,500 are just a start, more jobs were planed for February (9000). In 2011 Economists have predicted a resource boom, due to the monetary policy by the governor Glenn Steves. The bank has tried to boost certain sectors in the economy, however he kept the interest rates at 3%. That might cut into the current boom and slow it down. The main concern is on the value of the Australian dollar.

Even though there had been a rise in total workforce, unemployment has not improved and remained at 5.4%. Nevertheless, there are optimistic signs of economic improvement for Australia.

Basically, article is about Egypt's endeavor to find foreign investors for financing infrastructure projects and increasing its dwindling foreign currency reserves. Two of the most important terms derived from the week 2 are scarcity and opportunity cost. Turkish investments of $20 bn dollars and 500 mio euros from the EU (depending on Egypt securying the loan from IMF) in Egyptian infrastructure and foreign currency reserves deficit have an opportunity cost of spending that amount of money for other purposes. In this article, Egypt's foreign currency reserves and budget are scarce, so Egypt wants to get money to reduce unemployment rate via economic growth (4.5 %). Here we also have the factor of production - this is capital which comes from investments in physical capital (infrastructure) and in my opinion also human capital (reducing unemployment, improving education and healthcare perhaps ...). One thing that will be crucial for Egypt is the factor of entrepreneurship.

The article focuses on the trade relations between Germany and Pakistan. The amount of trade articles has risen from last years 2.32 billion to 2.89 billion dollars. The relations in between these two countries has grown every since the Pakistani ban for importing items because of the mad cow disease (about 10 years ago). Luckily, the ban and the disease blew away and the situation is under control. Germany and Pakistan are working toward a bilateral agreement of trade and looking forward to new investment in the future.

New Zealand's terms of trade rose for the first time in seven quarters, led by higher export prices for dairy products while a strong kiwi dollar helped constrain import prices.

This article examines how the Euro has been very strong compared to the dollar for the last 2 years.