critically discuss main causes of exchange rate volatility in the foreign exchange markets.
With close reference to recent movements in UK Pound/US Dollar spot exchange rate, critically discuss main causes of exchange rate volatility in the foreign exchange markets. (Use relevant financial data and charts to illustrate your answer).
More or less 300 words for this question.
Notes:
The question requires you to display the knowledge and understanding of:
✓ movements in spot exchange rate and exchange rate volatility in the foreign exchange markets generally.
Specifically, this question requires you to:
- a) critically discuss the main causes of exchange rate volatility in the foreign exchange markets.
- b) make close reference to recent movements in the £/$ spot exchange rates (and not references to any other exchange rates) in your critical explanations of exchange rate volatility.
- Note that you are expected to use of relevant financial data and charts to illustrate your answer in order to earn good marks.
Criteria:
Knowledge
The work should have a substantial knowledge of relevant material, showing a clear grasp of themes, questions and issues therein.
Analysis
The analysis should be comprehensive, clear and orderly.
Argument and Structure
The argument should be well supported, focused, clear and logically structured.
Critical Evaluation
The work should contain distinctive or independent thinking; and formulate an independent position in relation to theory and/or practice.
Reference to literature
Critical appraisal of up-to-date and/or appropriate literature. Recognition of different perspectives. Very good use of a wide range of sophisticated source material.
