Global Business Today Ninth Edition Chapter 10
The Foreign Exchange Market
Chapter Outline
OPENING CASE: Embraer and the Wild Ride of the Brazilian Real
INTRODUCTION
THE FUNCTIONS OF THE FOREIGN EXCHANGE MARKET
Currency Conversion
Insuring Against Foreign Exchange Risk
Management Focus: Volkswagen’s Hedging Strategy
THE NATURE OF THE FOREIGN EXCHANGE MARKET
ECONOMIC THEORIES OF EXCHANGE RATE DETERMINATION
Prices and Exchange Rates
Interest Rates and Exchange Rates
Investor Psychology and Bandwagon Effects
Country Focus: Quantitative Easing, Inflation, and the Value of the U.S. Dollar
Summary of Exchange Rate Theories
EXCHANGE RATE FORECASTING
The Efficient Market School
The Inefficient Market School
Approaches to Forecasting
CURRENCY CONVERTIBILITY
FOCUS ON MANAGERIAL IMPLICATIONS
Foreign Exchange rate Risk
Transaction Exposure
Translation Exposure
Economic Exposure
Reducing Translation and Transaction Exposure
Reducing Economic Exposure
Other Steps for Managing Foreign Exchange Risk
SUMMARY
Global Business Today Ninth Edition Chapter 10
CRITICAL THINKING AND DISCUSSION QUESTIONS
CLOSING CASE: The Rise (and Fall) of the Japanese Yen
Learning Objectives
1. Describe the functions of the foreign exchange market.
2. Understand what is meant by spot exchange rates.
3. Recognize the role that forward exchange rates play in insuring against foreign exchange risk.
4. Understand the different theories explaining how currency exchange rates are determined and
their relative merits.
5. Identify the merits of different approaches toward exchange rate forecasting.
6. Compare and contrast the differences between translation, transaction and economic exposure,
and explain what managers can do to manage each type of exposure.
Chapter Summary
This chapter focuses on the foreign exchange market. At the outset, the chapter explains how the
foreign exchange market works. Included in this discussion is an explanation of the difference
between spot exchange rates and forward exchange rates. The nature of the foreign exchange
market is discussed, including an examination of the forces that determine exchange rates. In
addition, the author provides a discussion of the degree to which it is possible to predict exchange
rate movements. Other topics discussed in the chapter include exchange rate forecasting, currency
convertibility, and the implications of exchange rate movements on business. Finally, the chapter
concludes with a discussion of the implications of exchange rates for businesses. For instance, it is
absolutely critical that international businesses understand the influence of exchange rates on the
profitability of trade and investment deals. Adverse changes in exchange rates can make
apparently profitable deals unprofitable.
Opening Case: Embraer and the Wild Ride of the Brazilian Real
Summary
The opening case describes the efforts by Brazilian aircraft maker Embraer to limit the impact of
changing exchange rates on its revenues. Embraer is exposed to exchange rate fluctuations
because the company prices its aircraft in U.S. dollars and then translates its revenues back into
Brazilian reals. The company was negatively impacted in the mid-2002s by the appreciation of the
Global Business Today Ninth Edition Chapter 10
real versus the dollar and later when efforts to minimize its exposure were foiled by the 2008
global financial crisis. Discussion of the case can revolve around the following questions:
Suggested Discussion Questions
QUESTION 1: Brazilian aircraft maker Embraer has been negatively impacted not only by its
exposure to changing exchange rates, but also by its attempts to limit its exposure through the use
of forward contracts. What options other than forward contracts might Embraer have used to limit
its foreign exchange rate exposure?
QUESTION 2: What does Embraer’s experience tell you about the forward market? Could the
company’s losses in 2008 have been prevented? Do you agree with Embraer’s decisions to stop
using forward contracts?
02-26/embraer-rises-as-earnings-top-forecast-on-weaker-brazil-currency}, and
{http://www.businessweek.com/news/2013-11-07/embraer-winning-global-regional-jet-contest-
corporate-brazil}.
Chapter Outline with Lecture Notes, Video Notes, and Teaching Tips
INTRODUCTION
Global Business Today Ninth Edition Chapter 10
A) This chapter has three main objectives. The first objective is to explain how the foreign
exchange market works. The second objective is to examine the forces that determine exchange
rates and to discuss the degree to which it is possible to predict exchange rate movements. The
third objective is to map the implications for international business of exchange rate movements
and the foreign exchange market.
B) The foreign exchange market is a market for converting the currency of one country into that
of another country.
C) The exchange rate is the rate at which one currency is converted into another.
D) Dealing in multiple currencies is a requirement of doing business internationally. Therefore, it
is important to understand the risks involved and how varying exchange rates affect the
attractiveness of different investments and deals over time. Firms can use the foreign exchange
market to hedge the risk of adverse exchange rate changes, but doing so can prevent firms from
benefiting from favorable changes.
THE FUNCTIONS OF THE FOREIGN EXCHANGE MARKET
A) The foreign exchange market serves two main functions. The first is to convert the currency of
one country into the currency of another. The second is to provide some insurance against foreign
exchange risk (the adverse consequences of unpredictable changes in exchange rates).
Currency Conversion
B) International businesses have four main uses of foreign exchange markets. First, the payments a
company receives for its exports, the income it receives from foreign investments, or the income it
receives from licensing agreements with foreign firms may be in foreign currencies. Second,
international businesses use foreign exchange markets when they must pay a foreign company for
its products or services in its country’s currency. Third, international businesses use foreign
exchange markets when they have spare cash that they wish to invest for short terms in money
markets. Finally, currency speculation is another use of foreign exchange markets. Currency
speculation typically involves the short-term movement of funds from one currency to another in
the hopes of profiting from shifts in exchange rates. Carry trade involves borrowing in one
currency where interest rates are low and then using the proceeds to invest in another currency
where interest rates are high.
Teaching Tip: XE.com {http://www.xe.com/} provides a real time currency cross-rate chart, and
an option to do currency conversions.
Insuring Against Foreign Exchange Risk
C) A second function of the foreign exchange market is to provide insurance to protect against the
possible adverse consequences of unpredictable changes in exchange rates, or foreign exchange
risk.
Global Business Today Ninth Edition Chapter 10
Spot Exchange Rates
D) The spot exchange rate is the rate at which a foreign exchange dealer converts one currency
into another currency on a particular day. Spot rates change continually, and are determined by the
interaction between the demand and supply of that currency relative to the demand and supply of
other currencies.
Forward Exchange Rates
E) A forward exchange occurs when two parties agree to exchange currency and execute the deal
at some specific date in the future. A forward exchange rate occurs when two parties agree to
exchange currency and execute the deal at some specific date in the future.
F) Rates for currency exchange are typically quoted for 30, 90, or 180 days into the future.
Management Focus: Volkswagen’s Hedging Strategy
Summary
This feature examines the effects of Volkswagen’s decision to not properly hedge its foreign
exchange exposure in 2003. Volkswagen saw a 95 percent drop in its fourth quarter profits after
an unexpected surge in the value of the euro left the company with losses of $1.5 billion.
Traditionally, Volkswagen, which produced its vehicles in Germany and exported them to the
United States, hedged some 70 percent of its foreign exchange exposure. However, in 2003, the
company made the unfortunate decision to hedge just 30 percent of its exposure. Discussion of the
feature can begin with the following questions:
Suggested Discussion Questions
1. Explain how Volkswagen’s failure to fully protect itself against foreign exchange fluctuations
had a negative effect on the company. What can Volkswagen and other companies learn from this
experience?
2. Volkswagen saw its fourth quarter 2003 profits tumble 95 percent after losing €1.2 billion in
currency losses after the euro rose relative to the U.S. dollar. Why was Volkswagen so vulnerable
to the change in the value of the euro relative to the U.S. dollar?
Global Business Today Ninth Edition Chapter 10
Discussion Points: Volkswagen was especially vulnerable to the rise of the euro against the U.S.
and {http://www.businessweek.com/ap/2012-10-12/eastern-europe-gives-volkswagen-a-sales-
boost}.
Lecture Note: To expand the discussion to include Volkswagen’s other foreign investments,
consider {http://www.businessweek.com/articles/2013-12-13/skidding-volkswagen-changes-
drivers-in-the-u-dot-s-dot} and {http://www.bbc.com/news/business-21009789}.
Currency Swaps
G) A currency swap is the simultaneous purchase and sale of a given amount of foreign exchange
for two different value dates. Swaps are transacted between international businesses and their
banks, between banks, and between governments when it is desirable to move out of one currency
into another for a limited period without incurring foreign exchange rate risk.
THE NATURE OF THE FOREIGN EXCHANGE MARKET
A) The foreign exchange market is not located in any one place. Rather, it is a global network of
banks, brokers, and foreign exchange dealers connected by electronic communications systems.
The most important trading centers are London, New York, Zurich, Tokyo, and Singapore. Two
significant features of the market are (1) it never sleeps, and (2) high-speed computer linkages
between trading centers around the globe have effectively created a single market.
B) The exchange rates quoted worldwide are basically the same. If different U.S. dollar/Japanese
yen rates were being offered in New York and Tokyo, there would be an opportunity for arbitrage
and the gap would close. An illustrative example can be done showing how someone could make
money through arbitrage (buying a currency low and selling it high), and how this would affect
the supply and demand for the currencies in both markets to close the gap.
C) The U.S. dollar frequently serves as a vehicle currency to facilitate the exchange of two other
currencies.
Global Business Today Ninth Edition Chapter 10
ECONOMIC THEORIES OF EXCHANGE RATE DETERMINATION
A) At the most basic level, exchange rates are determined by the demand and supply for different
currencies. Most economic theories of exchange rate movements seem to agree that three factors
have an important impact on future exchange rate movements in a country’s currency: the
country’s price inflation, the country’s interest rate, and market psychology.
Prices and Exchange Rates
B) To understand how prices are linked to exchange rates, it is important to understand the law of
one price.
The Law of One Price
C) The law of one price states that in competitive markets free of transportation costs and barriers
to trade (such as tariffs), identical products sold in different countries must sell for the same price
when their price is expressed in terms of the same currency.
Purchasing Power Parity
D) If the law of one price were true for all goods and services, the purchasing power parity (PPP)
exchange rate could be found from any individual set of prices. A less extreme version of the PPP
theory states that given relatively efficient markets – that is, markets in which few impediments to
international trade and investment exist – the price of a “basket of goods” should be roughly
equivalent in each country.
Lecture Note: The Economist informally tests this theory every year using its “Big Mac Index.”
To see the most recent example, go to {http://www.economist.com/news/finance-and-
economics/21595037-our-bun-loving-guide-currencies-grease-proof-taper}.
Money Supply and Price Inflation
E) There is a positive relationship between the inflation rate and the level of money supply. When
the growth in a country’s money supply is greater than the growth in its output, inflation will
occur. A country with a high inflation rate will see its currency depreciate
F) Simply put, PPP suggests that changes in relative prices between countries will lead to
exchange rate changes. The empirical tests suggest that this relationship does not hold in the long
run, but not in the short run. While PPP assumes no transportation costs or barriers to trade and
investment, it also assumes that governments do not intervene to affect their exchange rates.
Empirical Tests of PPP Theory
G) Extensive empirical testing of the PPP theory has not shown it to be completely accurate in
estimating exchange rate changes.
Global Business Today Ninth Edition Chapter 10
Interest Rates and Exchange Rates
H) Interest rates also affect exchange rates. The Fisher Effect says that a country’s nominal
interest rate (i) is the sum of the required real rate of interest (r) and the expected rate of inflation
over the period for which the funds are to be lent (I).
i = r + I
I) The International Fisher Effect states that for any two countries the spot exchange rate should
change in an equal amount but in the opposite direction to the difference in nominal interest rates
between two countries. Stated more formally:
(S1 – S2) / S2 x 100 = i $ – i ¥
where i $ and i ¥ are the respective nominal interest rates in two countries (in this case the U.S.
and Japan), S1 is the spot exchange rate at the beginning of the period and S2 is the spot exchange
rate at the end of the period.
J) While interest rate differentials suggest future exchange rates, this appears to hold in the long
run but not necessarily in the short run.
Video Note: The video in the International Business Library on Pinterest
(http://www.pinterest.com/mheibvideos/) Bernanke: U.S. Economy Faces ‘Sluggish’ Growth
Outlook explores the relationship between inflation, interest rates, and the U.S. dollar, and fits in
well with this discussion.
Investor Psychology and Bandwagon Effects
K) Investor psychology and bandwagon effects can also influence exchange rate movements.
Expectations on the part of traders can turn into self-fulfilling prophecies, and traders can joint the
bandwagon and move exchange rates based on group expectations. This is known as the
bandwagon effect. While such changes can be important in explaining some short-term exchange
rate movements, they are very difficult to predict. At times governmental intervention can prevent
the bandwagon from starting, but at other times it is ineffective and only encourages traders.
Country Focus: Quantitative Easing, Inflation, and the Value of the U.S. Dollar
Summary
This feature describes the process of quantitative easing and its implications for the economy. The
injection of money into the market by the Federal Reserve in the fall of 2010 was designed to help
stimulate the struggling U.S. economy. The move was criticized though by those who felt the
move would actually generate inflation and a falling dollar. Time proved the critics wrong as the
value of the currency remained virtually unchanged for several months. After pursuing further
rounds of quantitative easing in 2011 through 2013, the Federal Reserve indicated it would
Global Business Today Ninth Edition Chapter 10
continue with the policy at least through 2014. Discussion of the feature can begin with the
following questions.
Suggested Discussion Questions
1. What does the 2010 purchase by the Federal Reserve of $600 billion in U.S. government bonds
tell you about U.S. fiscal policy? What was the Federal Reserve trying to accomplish?
2. Why did the Federal Reserve receive so much criticism for its policy of quantitative easing? Do
you agree with the critics? Was the policy simply mercantilism in disguise?
L) Relative monetary growth, relative inflation rates, and nominal interest rate differentials are all
moderately good predictors of long-run changes in exchange rates. Consequently, international
businesses should pay attention to countries’ differing monetary growth, inflation, and interest
rates.
EXCHANGE RATE FORECASTING
A) A company’s need to predict future exchange rate variations raises the issue of whether it is
worthwhile for the company to invest in exchange rate forecasting services to aid decision-making.
Two schools of thought address this issue. One school, the efficient market school, argues that
forward exchange rate do the best possible job of forecasting future spot exchange rates, and,
therefore, investing in forecasting services would be a waste of money. The other school of
thought, the inefficient market school, argues that companies can improve the foreign exchange
market’s estimate of future exchange rates (as contained in the forward rate) by investing in
forecasting services.
Global Business Today Ninth Edition Chapter 10
The Efficient Market School
B) Many economists believe the foreign exchange market is efficient at setting forward rates. An
efficient market is one in which prices reflect all available information. There have been a large
number of empirical tests of the efficient market hypothesis. Although most of the early work
seems to confirm the hypothesis (suggesting that companies should not waste their money on
forecasting services), some recent studies have challenged it.
The Inefficient Market School
C) An inefficient market is one in which prices do not reflect all available information. In an
inefficient market, forward exchange rates will not be the best possible predictors of future spot
exchange rates. If this is true, it may be worthwhile for international businesses to invest in
forecasting services.
Approaches to Forecasting
D) Two approaches to forecasting exchange rates are fundamental analysis and technical analysis.
Fundamental Analysis
E) Forecasters that use fundamental analysis draw upon economic theories to predict future
exchange rates, including factors like interest rates, monetary policy, inflation rates, or balance of
payments information.
Technical Analysis
F) Forecasters that use technical analysis typically chart trends, and believe that past trends and
waves are reasonable predictors of future trends and waves.
CURRENCY CONVERTIBILITY
A) Many currencies are not freely convertible into other currencies. A currency is said to be freely
convertible when a government of a country allows both residents and non-residents to purchase
unlimited amounts of foreign currency with the domestic currency.
B) A currency is said to be externally convertible when non-residents can convert their holdings
of domestic currency into a foreign currency, but when the ability of residents to convert currency
is limited in some way. A currency is nonconvertible when both residents and non-residents are
prohibited from converting their holdings of domestic currency into a foreign currency.
C) Free convertibility is the norm in the world today, although many countries impose some
restrictions on the amount of money that can be converted. The main reason to limit convertibility
Global Business Today Ninth Edition Chapter 10
is to preserve foreign exchange reserves and prevent capital flight (when residents and
nonresidents rush to convert their holdings of domestic currency into a foreign currency).
D) Countertrade refers to a range of barter like agreements by which goods and services can be
traded for other goods and services. It can be used in international trade when a country’s
currency is nonconvertible.
Teaching Tip: The American Countertrade Association {http://www.globaloffset.org/} maintains a
web site with information for those interested in countertrade.
IMPLICATIONS FOR MANAGERS
A) First, it is absolutely critical that international businesses understand the influence of exchange
rates on the profitability of trade and investment deals. Foreign exchange risk can be divided into
three main categories: transaction exposure, translation exposure, and economic exposure.
Transaction Exposure
B) Transaction exposure is the extent to which the income from individual transactions is
affected by fluctuations in foreign exchange values.
Translation Exposure
C) Translation exposure is the impact of currency exchange rate changes on the reported
financial statements of a company. Translation exposure is basically concerned with the present
measurement of past events.
Video Note: The video in the International Business Library on Pinterest
(http://www.pinterest.com/mheibvideos/) Dollar’s Falling Value Ripples through U.S. Economy
examines how various U.S. companies are dealing with the falling dollar. The video provides an
opportunity to extend this discussion and also the Implications for Managers section.
Economic Exposure
D) Economic exposure is the extent to which a firm’s future international earning power is
affected by changes in exchange rates. Economic exposure is concerned with the long-term effect
of changes in exchange rates on future prices, sales, and costs.
Reducing Translation and Transaction Exposure
E) In addition to buying forward and using swaps, firms can minimize their foreign exchange
exposure through leading and lagging payables and receivables (paying suppliers and collecting
payment from customers early or late depending on expected exchange rate movements).
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F) A lead strategy involves attempting to collect foreign currency receivables early when a
foreign currency is expected to depreciate and paying foreign currency payables before they are
due when a currency is expected to appreciate. A lag strategy involves delaying collection of
foreign currency receivables if that currency is expected to appreciate and delaying payables if the
currency is expected to depreciate. Lead and lag strategies can be difficult to implement.
Reducing Economic Exposure
G) The key to reducing economic exposure is to distribute the firm’s productive assets to various
locations so the firm’s long-term financial well-being is not severely affected by changes in
exchange rates. In general, reducing economic exposure necessitates that the firm ensure its assets
are not too concentrated in countries where likely rises in currency values will lead to damaging
increases in the foreign prices of the goods and services they produce.
Other Steps for Managing Foreign Exchange Risk
H) To manage foreign exchange risk: (a) central control of exposure is needed to protect resources
efficiently and ensure that each subunit adopts the correct mix of tactics and strategies; (b) firms
should distinguish between transaction and translation exposure on the one hand, and economic
exposure on the other hand; (c) the need to forecast future exchange rates cannot be overstated; (d)
firms need to establish good reporting systems so the central finance function can regularly
monitor the firm’s exposure position; (e) the firm should produce monthly foreign exchange
exposure reports.
Critical Thinking and Discussion Questions
1. The interest rate on South Korean government securities with one-year maturity is 4 percent and
the expected inflation rate for the coming year is 2 percent. The interest rate on U.S. government
securities with one-year maturity is 7 percent and the expected rate of inflation is 5 percent. The
current spot exchange rate for Korea won is $1 = W1,200. Forecast the spot exchange rate one
year from today. Explain the logic of your answer.
2. Two countries, Britain and the US produce just one good: beef. Suppose that the price of beef
in the US is $2.80 per pound, and in Britain it is £3.70 per pound.
(a) According to PPP theory, what should the $/£ spot exchange rate be?
(b) Suppose the price of beef is expected to rise to $3.10 in the US, and to £4.65
Global Business Today Ninth Edition Chapter 10
in Britain. What should be the one year forward $/£ exchange rate?
(c) Given your answers to parts (a) and (b), and given that the current interest rate in the
US is 10 percent, what would you expect current interest rate to be in Britain?
3. Reread the Management Focus feature on Volkswagen in this chapter, then answer the
following questions:
a) Why do you think management at Volkswagen decided to hedge only 30 percent of their foreign
currency exposure in 2003? What would have happened if they had hedged 70 percent of their
exposure?
b) Why do you think the value of the U.S. dollar declined against that of the Euro in 2003?
c) Apart from hedging through the foreign exchange market, what else can Volkswagen do to
reduce its exposure to future declines in the value of the U.S. dollar against the euro?
Answer:
4. You manufacture wine goblets. In mid June you receive an order for 10,000 goblets from
Japan. Payment of ¥400,000 is due in mid December. You expect the yen to rise from its present
rate of $1=¥130 to $1=¥100 by December. You can borrow yen at 6% per annum. What should
you do?
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198
5. You are CFO of a U.S. firm whose wholly owned subsidiary in Mexico manufactures
component parts for your U.S. assembly operations. The subsidiary has been financed by bank
borrowings in the United States. One of your analysts told you that the Mexican peso is expected
to depreciate by 30 percent against the dollar on the foreign exchange markets over the next year.
What actions, if any, should you take?
Closing Case: The Rise (and Fall) of the Japanese Yen
Summary
The closing case describes the change in the value of the Japanese yen during the 2000s. In the
early part of the decade, the yen was relatively weak relative to the U.S. dollar, but strengthened at
the end of the decade as investors reacted to changes in interest rates brought on by the global
financial crisis. The changing value of the yen had direct implications for companies like Toyota.
Discussion of the case can revolve around the following questions:
Suggested Discussion Questions
QUESTION 1: Why did the yen carry trade work during the early 2000s? Why did it stop working
after 2008?
Global Business Today Ninth Edition Chapter 10
QUESTION 2: What drove an increase in the value of the yen between 2008 and 2011?
QUESTION 3: Why did the policy of the Abe government to purchase government securities help
drive down the value of the yen? What was the mechanism at work here?
QUESTION 4: Do you think the Japanese government is engaging in currency manipulation? If
so, what should other nations do about this?
QUESTION 5: Who in Japan benefits from a devaluation of the yen? Who does this hurt in
Japan?
QUESTION 6: What does this case teach you about the way foreign exchange markets work?
Global Business Today Ninth Edition Chapter 10
© 2016 by McGraw-Hill Education.
This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
200
disaster for companies like Toyota that saw their exports drop and the value of their overseas
profits plummet. Most students will recognize that it is vital for managers to understand the
connections between the foreign exchange market and firm profits so they can take steps to
maximize opportunities and minimize risk.
Video Note: To extend this case and explore the impact of a weak yen on Japan’s economy,
consider {http://www.businessweek.com/videos/2014-10-23/weak-yen-is-good-for-japanese-
economy-kumada}.
Continuous Case Concept
As the world’s automakers search around the globe for the best suppliers for their parts, and at the
same time, focus on new markets such as China and India, controlling for changes in exchange
rates becomes an important part of their financial strategies.
• Ask students to identify the types of exposure to foreign exchange rates auto makers are
likely to encounter.
• Then, ask students to develop a plan for controlling for the exposure. Discuss why a
company might choose one hedging strategy over another. For example, VW is expanding
its presence in the United States to capitalize on cheaper labor and the weak dollar. The
company has also benefited from its hedging strategy to control for exposure to currency
movements. Several automakers including Honda, Nissan, and Toyota have struggled with
a strong yen which has limited their ability to expand globally.
• Finally, ask students to consider what exchange rates mean to companies that draw a
significant percentage of their revenues from foreign countries. How do the strategies of
these companies differ from those of companies that can rely on their domestic market for
the majority of their sales?
This feature ties in well with the discussion of the Management Focus: Volkswagen’s Hedging
Strategy. The case can be used to supplement the discussion of this feature. This feature could
also be expanded into a mini-case by asking students to identify companies that have reported
losses or gains due to exchange rate movements, and then, exploring the strategic responses of the
firms involved.
globalEDGE Exercises
The resources for each exercise can be easily located by using the search box at the top of the
globalEDGE website at http://globalEDGE.msu.edu
Exercise 1
Global Business Today Ninth Edition Chapter 10
Search phrase: Regional Trade Agreements
Resource Name: World Trade Organization: Regional Trade Agreements
Website: http://www.wto.org/english/tratop_e/region_e/region_e.htm
globalEDGE Category: Regional Trade Agreements
Additional Info:
The Regional Trade Agreements page of the WTO provides a lot of background and analysis on
RTA’s around the world. To access individual agreements, one has to enter the “RTA Database”
following a link on this page. You can also access Maps of RTAs by Country to see the
agreements for each country.
Exercise 2
Search phrase: COMESA
Resource Name: COMESA: Introduction
Website: http://globaledge.msu.edu/trade-blocs/comesa/
globalEDGE Category: Trade Blocs: COMESA
Additional Info:
The Common Market for Eastern and Southern Africa (COMESA) is a free trade area that
encompasses 19 countries stretching from Libya to Zimbabwe. The Trade Blocs section of
globalEDGE provides information on the history and objectives of the trade bloc, as well as its
member states.
Additional Readings and Sources of Information
Canon Raises Full Year Profit Forecasts Citing Weaker Yen
http://www.businessweek.com/news/2014-10-27/canon-raises-full-year-profit-forecasts-citing-
weaker-yen
Lower Yen Good for Japanese Companies
http://www.businessweek.com/videos/2014-10-07/lower-yen-good-for-japanese-companies-vaidya
Volkswagen Sales Rise 11.9 percent in July
http://www.businessweek.com/ap/2012-08-22/volkswagen-sales-rise-11-dot-9-percent-in-july
Why Hasn’t the Euro Fallen More in the Crisis?
http://www.businessweek.com/articles/2012-04-25/why-hasnt-the-euro-fallen-more-in-the-crisis
The U.S. Dollar Rally: What Investors Should Be Watching
http://www.businessweek.com/investor/content/jan2010/pi20100120_622348.htm
Global Business Today Ninth Edition Chapter 10
Dollar Falls; It’s the Euro’s Day
http://www.businessweek.com/ap/2012-06-29/dollar-falls-its-the-euros-day