Question

Present recent exchange rates between two currencies, and then show how this exchange rate changed to cause appreciation for one of the currencies. Then another set of currencies showing depreciation of one of the currencies.The examples will include 4 different currencies.

Answer 1

1. EUR/USD

2. GBP/NGN

Step-by-step explanation:

1 . Euro against the United States Dollars:

As at Monday 15th June, the Euros traded for 1.12 USD per EUR, however it appreciated with about 0.8% increase to 1.13 USD on Tuesday 16th ($1.13-$1.12= $0.01 profit per trade). For instance, if someone had bought €10,000 Euros at the initial exchange rate and traded at this value he will earn a profit of $100 ($0.01 x 10000).

2. Pound Sterling against the Naira:

The exchange rate of NGN as at Monday 15th June was 482.79 NGN per GBP, however it depreciated with a loss of -4.64 NGN as at Tuesday 16th to 487.43 per GBP (482.79-487.43).

Assuming one used 482,790 NGN to buy £1,000 (482.79*1000) using the initial lower exchange rate and decides to sell using recent rates , he would be getting a loss of about 4,640 NGN or £9.51 (482,790-487430).