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WELCOME TO JULY'S 2ND EDITION

THIS EDITION FOCUSES ON CURRENCY MARKETS' AFFECTS ON RESOURCES' PRICES.

THEORETICAL DATA IS USED TO INTRODUCE KEY POINTS, AND REAL-WORLD DATA IS SHOWN LATER.

THE FOOD AND BEVERAGE INDUSTRY IS LOOKED AT (FROM TOURISM TO International

TRADE), AND EXTENSIONS CAN BE MADE TO ANY INDUSTRY

HERE ARE 3 EXAMPLES TO INTRODUCE CURRENCY MARKETS.
 
EACH INVOLVES:

THE EURO'S STRENGTH COMPARED TO THE CANADIAN DOLLAR.

 

AN ITALIAN TOURIST, WITH A WEEKLY SALARY OF 500.00 EUROS (AFTER TAX), BUYING A BOTTLE OF MAPLE SYRUP AT 10.00 Canadian dollars IN TORONTO, CANADA.


A CANADIAN TOURIST, WITH A WEEKLY SALARY OF 1,200.00 Canadian dollars (AFTER TAX), BUYING A TOMATO, MOZARELLA, AND BASIL SALAD AT 12.00 EUR0s, IN TUSCANY, ITALY.

EXAMPLE 1:

 

EUR/CAD: 1.3500

THIS MEANS:

1.00 EURO BUYS 1.35 CANADIAN DOLLARS (1 x 1.3500 = 1.35).

1.00 CANADIAN DOLLAR BUYS 0.74 EURO (1 / 1.3500 = 0.741).

SO EVERY 100.00 EUROS THE ITALIAN TOURIST EXCHANGES INTO CANADIAN DOLLARS AT THE AIRPORT, THAT SAME ITALIAN TOURIST GETS 135.00 CANADIAN DOLLARS.

 

THE COST OF THE 10.00 Canadian dollars SYRUP IS EQUAL TO 7.41 EUROS. THIS IS 1.48% OF THE ITALIAN'S WEEKLY SALARY. MEANING THE ITALIAN, WITH THAT WEEKLY SALARY, COULD BUY 67 BOTTLES OF SYRUP.

 

AND EVERY 100.00 CANADIAN DOLLARS THE CANADIAN TOURIST EXCHANGES INTO EUROS AT THE AIRPORT, THAT SAME CANADIAN TOURIST GETS 74.10 EUROS. 

 

THE COST OF THE 12.00 EUROs SALAD IS EQUAL TO 16.20 Canadian dollars. THIS IS 1.35% OF THE CANADIAN'S WEEKLY SALARY. MEANING THE CANADIAN, WITH THAT WEEKLY SALARY, COULD BUY 74 SALADS.

SUMMARY:

AT EUR/CAD = 1.3500:

1 - A 10.00 Canadian dollars syrup IS EQUAL TO 7.41 EUROS.
 

2 - THIS IS 1.48% OF THE ITALIAN'S WEEKLY SALARY.
 

3 - THE ITALIAN COULD BUY 67 BOTTLES OF SYRUP WITH THAT WEEKLY WAGE.
 

4 - A 12.00 Euros SALAD IS equal to 16.20 

Canadian dollars.
 

5 - THIS IS 1.35% OF THE CANADIAN'S WEEKLY SALARY.
 

6 - THE CANADIAN COULD BUY 74 SALADS WITH THAT WAGE. 

EXAMPLE 2

EUR/CAD: 1.3750

THIS MEANS: 

1.00 EURO BUYS 1.38 CANADIAN DOLLARS (1 x 1.3750 = 1.375).

1.00 CANADIAN DOLLAR BUYS 0.73 EUROS (1 / 1.3750 = 0.727).

SO EVERY 100.00 EUROS THE ITALIAN TOURIST EXCHANGES INTO CANADIAN DOLLARS AT THE AIRPORT, THAT SAME ITALIAN TOURIST GETS 138.00 CANADIAN DOLLARS.

THE COST OF THE 10 Canadian dollars SYRUP IS EQUAL TO 7.27 EUROS. THIS IS 1.45% OF THE ITALIANS WEEKLY SALARY.

MEANING THE ITALIAN, WITH THAT WEEKLY SALARY, COULD BUY 68 BOTTLES OF SYRUP. 

AND EVERY 100.00 CANADIAN DOLLARS THE CANADIAN TOURIST EXCHANGES INTO EUROS AT THE AIRPORT, THAT SAME CANADIAN TOURIST GETS 72.73 EUROS.

THE COST OF THE 12 EUROs SALAD IS EQUAL TO 16.50 Canadian dollars. THIS IS 1.38% OF THE CANADIANS WEEKLY SALARY. MEANING THE CANADIAN, WITH THAT WEEKLY SALARY, COULD BUY 72 SALADS.

SUMMARY:

AT EUR/CAD: 1.3750

1 - A 10.00 Canadian dollars SYRUP IS EQUAL TO 7.27 EUROS.

2 - THIS IS 1.45% OF THE ITALIAN'S WEEKLY SALARY.
 

3 - THE ITALIAN COULD BUY 68 BOTTLES OF SYRUP WITH THAT WEEKLY WAGE.
 

4 - A 12.00 Euros SALAD IS EQUAL TO 16.50 Canadian dollars.
 

5 - THIS IS 1.38% OF THE CANADIAN'S WEEKLY SALARY. 
 

6 - THE CANADIAN COULD BUY 72 SALADS WITH THAT WAGE.

EXAMPLE 3

EUR/CAD: 1.4000

THIS MEANS: 

 

1.00 EURO BUYS 1.40 CANADIAN DOLLARS (1 x 1.4000 = 1.40).

1.00 CANADIAN DOLLAR BUYS 0.71 EUROS (1 / 1.4000 = 0.714).

 

SO EVERY 100.00 EUROS THE ITALIAN TOURIST EXCHANGES INTO CANADIAN DOLLARS AT THE AIRPORT, THAT SAME ITALIAN TOURIST GETS 140.00 CANADIAN DOLLARS.

THE COST OF THE 10.00 Canadian dollars SYRUP IS EQUAL TO 7.14 EUROS. THIS IS 1.43% (1.428%) OF THE ITALIANS WEEKLY SALARY.

 

MEANING THE ITALIAN, WITH THAT WEEKLY SALARY, COULD BUY 70 (at 1,428%) BOTTLES OF SYRUP.

 

AND EVERY 100.00 CANADIAN DOLLARS THE CANADIAN TOURIST EXCHANGES INTO EUROS AT THE AIRPORT, THAT SAME CANADIAN TOURIST GETS 71.43 EUROS.

THE COST OF THE 12.00 EUROs SALAD IS EQUAL TO 16.80 Canadian dollars. THIS IS 1.4% OF THE CANADIANS WEEKLY SALARY. MEANING THE CANADIAN, WITH THAT WEEKLY SALARY, COULD BUY 71 SALADS.


SUMMARY:

 

AT EUR/CAD = 1.4000:

 

1 - A 10.00 CAnadian Dollars SYRUP IS EQUAL TO 7.14 EUROS.
 

2 - THIS IS 1.428% OF THE ITALIAN'S WEEKLY SALARY.
 

3 - THE ITALIAN COULD BUY 70 BOTTLES OF SYRUP.

4 - A 12.00 EURos SALAD IS EQUAL TO 16.80 CAnadian Dollars.
 

5 - THIS IS 1.40% OF THE CANADIAN'S WEEKLY SALARY. 

6 - THE CANADIAN COULD BUY 71 salads.

Examples Analysis:

Graph 1: euroS costs of 10.00 canadian dollars toronto maple syrup as eur/cad increases:

Toronto Syrup Price 2_edited.jpg

the COST, FOR THE italian, OF THE toronto maple syrup DECREASES as eur/CAD INCREASES.

GRAPH 2: NUMBER OF BOTTLES OF TORONTO MAPLE SYRUP THE ITALIAN CAN BUY WITH

WEEKLY SALARY as eur/cad increases

SYRUP NUMBERS_edited.jpg

MORE BOTTLES OF TORONTO MAPLE SYRUP

CAN BE BOUGHT, WITH THE ITALIAN'S WEEKLY SALARY, AS EUR/CAD INCREASES.

ANALYSIS OF GRAPHS 1 AND 2

GRAPHS 1 AND 2 SHOW THE ITALIAN'S COSTS FOR TORONTO MAPLE SYRUP DECREASE, AND therefore is ABLE TO BUY MORE SYRUP WITH

WEEKLY SALARY, WHEN EURO STRENGTHENS COMPARED TO CANADIAN DOLLAR IN CURRENCY MARKETS,

graph 3: canadian dollars costS of the 12.00 euros tomato, mozarella, and basil salad as eur/cad increases:

CAD SALAD_edited.jpg

the cost, FOR THE CANADIAN, of the SALAD INCREASES as EUR/CAD INCREASES.

GRAPH 4: NUMBER OF TOMATO, MOZARELLA, AND BASIL SALADS THE CANADIAN CAN BUY WITH THE WEEKLY SALARY as eur/cad increases

NUMBER OF SALADS_edited.jpg

ANALYSIS OF GRAPHS 3 AND 4

GRAPHS 3 AND 4 SHOW THE CANADIAN'S COSTS FOR TOMATO, MOZARELLA, AND BASIL SALADs INCREASE, AND therefore IS ABLE TO BUY FEWER SALADS WITH WEEKLY SALARY, WHEN EURO STRENGTHENS COMPARED TO THE CANADIAN DOLLAR IN CURRENCY MARKETS,

A PRACTICAL APPLICATION FOR TOURISTS INVOLVING CURRENCY MARKETS:

SINCE CURRENCIES STRENGHTEN, AND WEAKEN, COMPARED TO DIFFERENT CURRENCIES AT THE SAME TIME IN CURRENCY MARKETS, TRACKING CAN BE DONE TO DECIDE WHEN TO BUY CURRENCIES FOR HOLIDAY DESTINATIONS.

 

I.E. HOLIDAY CURRENCIES CAN BE BOUGHT IN ADVANCE OF A HOLIDAY, AND HOLIDAY DESTINATIONS CAN BE CHOSEN BASED ON CURRENCY STRENGTHS.

 

it should be noted transport fees, accommodation fees. and other fees

should be taken into account too. 

REAL WORLD DATA:

BELOW IS THE REAL WORLD EUR/CAD FOR THE PAST 5 YEARS:

EUR-CAD 5 YEAR_edited.jpg

SOURCE: EUR/CAD 1.4558 (▼0.055%) | Google Finance

DATE ACCESSED: 09/07/2023

MULTIPLE CURRENCIES CURRENcY MARKET ANALYSIS:

EXAMPLE:

A TUSCAN COMPANY IMPORTING 3 SEPERATE RESOURCES FROM 3 DIFFERENT NATIONS,

Nation 1: AUSTRALIA

nation 1 currency: AUSTRALIAN dollar (AUD)

nation 2: CANADA

nation 2 currency: CANADIAN dollar (CAD)

nation 3: ghana

nation 3 currency: Ghanaian Cedi (GHS)

table 1:

ITALIAN COMPANY OPTIONS_edited.jpg

IT COULD BE THOUGHT SCENARIO 1 IS BEST FOR THE ITALIAN COMPANY. HOWEVER IF IT SELLS PRODUCTS TO 1, 2, OR ALL 3 OF THE AUSTRALIAN, CANADIAN, AND GHANAIAN NATIONS, THEN THE ITALIAN COMPANY'S SALES MIGHT DECREASE BECAUSE, FOR THESE NATIONS, THEIR IMPORT COSTS FROM BUYING FROM THE ITALIAN COMPANY INCREASE.

the italian company could employ mathematicians, and statisticians to calculate the best scenario, taking into account the level of srengthening, or weakening, of the currencies involved.

the complexity increases when more currencies are added to the table, and import/export taxes, shipping costs, etc,, are taken into account.

REAL WORLD DATA:

BELOW IS THE REAL WORLD EUR/AUD FOR THE PAST 5 YEARS:

EUR - AUD - 5_edited.jpg

SOURCE: EUR/AUD 1.6385 (▼0.29%) | Google Finance

DATE ACCESSED: 09/07/2023

 

 

BELOW IS THE REAL WORLD EUR/CAD AGAIN FOR THE PAST 5 YEARS:

EUR-CAD 5 YEAR_edited.jpg

SOURCE: EUR/CAD 1.4558 (▼0.055%) | Google Finance

DATE ACCESSED: 09/07/2023

BELOW IS THE REAL WORLD EUR/GHS FOR THE PAST 5 YEARS:

EUR - GHS - 5.jpeg

SOURCE: EUR/GHS 12.3804 (▼0.0091%) | Google Finance

DATE ACCESSED: 09/07/2023

Giles Thomas Richard Ward

(6) Giles Ward | LinkedIn

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