In Global terms the US Dollar is the leading currency and now the Euro is the second most important with the Sterling British Pound third. When the euro came into being, monetary policy became the responsibility of the independent European Central Bank (ECB), which was created for that purpose, and the national central banks of the Member States having adopted the euro. Together they compose the Euro system. Hence ECB is monitoring the Euro currency with the guidance of all the EU members.
International financial markets play a crucial role in global business. Business firms face many opportunities and threats from monetary systems and financial/capital markets. Organizations might issue securities in euro currency, because it will enable the companies to avoid a variety of monetary authority regulations and controls, and it provides them with an opportunity to escape the payment of some taxes. Thus this allows tax benefits and may be in terms of interest rates. Moreover the regulatory costs are also less. Thus the firm can raise the money in Euro currency markets. The Eurocurrency market helps to avoid many United States banking regulations and controls, and it can lead to reduction in the payment of some taxes. Thus the reasons that have led to the growth of the this market include the interest equalization tax, United States withholding tax on interest received by foreign owners of domestic securities, Regulations M and Q, and regulations from the U.S. Office of Foreign Direct Investment (OFDI).
The US dollar has declined heavily against Euro. In fact as of now 1Euro= 1.23US Dollar. Economic theory states that there are four major factors that determine the exchange rate between two curr...
... middle of paper ...
...S control. Now the investor has another option in form of EURO. Some of the subsidy the USA gains would be transferred to the EU and help balance out some of the problems of the present heterogeneous economic structure still in place. The strength of the euro relative to the US dollar might encourage the use of the euro as an alternative reserve currency. Thus no one has to be dynamic and keep track of both Euro and dollar movements to make the future strategy.
According to the EC, the benefits of Euro are elimination of exchange rate fluctuations; businesses are better able to plan their investment decisions because of reduced uncertainties; elimination of the various transaction costs; and price transparency as well as enhanced competition, more opportunities for consumers, and more attractive opportunities for foreign investors with the benefits of the Euro.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- Table of Contents Page Introduction 3 Review of Perspective on Risk management in supply chains 3-5 Review of ERP systems in lean production 5-8 Safety Stock planning under casual demand forecasting 9 Bibliography and references 10 Introduction The following is the authors’ review of three articles from journals relating to the Operations Management Course. Each of the articles will be reviewed and analysed as to their relevance to a particular or number of subjects of the course.... [tags: Operations Management Essays]
2647 words (7.6 pages)
- Discussions regarding financial markets and natural disasters often center on risk management, highlighting the extreme losses than can occur. As risk management progresses into companies all over the world, determining the amount of risk present, and adjusting those risks in the best way suited for future objectives must be taken into consideration. Researchers are focusing on ways to calculate and diminish uncertainty, as well as detect, mitigate, and transfer the risk associated with over-industrializing and expansion of companies.... [tags: Risk management, Risk, Uncertainty, Management]
930 words (2.7 pages)
- FINANCIAL SOURCES AND DOCUMENTS I would invite my friend to coffee and explain to him the situation if he wants to expand on financial sources available and the legal/financial documentation he has a duty to provide. Finance If he wants to expand as a sole trader or partnership, there are a variety of choices for his business as follow. Personal Savings: This is the cash my friend has ready. It is a quick and easy source of funding for him. He can choose if he wants to retain his savings or use them to purchase tools, cars, gears or other equipment his business 's requires.... [tags: Balance sheet, Finance, Financial statements, Loan]
1000 words (2.9 pages)
- Part I: The Purpose of the Report and the Research Experience The main purpose of this report was to evaluate and research the financial information about Priceline during the past five years to evaluate the future developing of the company. In order to perform my research, I used Priceline’s 10 K report to get the financial information that was needed for this research. In addition, I used the company’s website where I found basic information about Priceline history and also other businesses that Priceline’s group owns.... [tags: Business Analysis, Financial Analysis]
2205 words (6.3 pages)
- You may ask yourself what is international management. Well, international management is the practice of managing business operations in at least two or more countries. Professionals are familiar with the language culture, economic, and political environment, and business practices of countries in which multinational firms actively trade and invest. They also have the conceptual and analytical skills that are needed to formulate effective management strategies and policies to benefit all the firm’s constituents in today’s globally competitive environment.... [tags: Management, Business, Culture, Globalization]
1045 words (3 pages)
- Macroeconomic Impact on Business Operations This paper will discuss the objective of monetary policy and its influence on the performance of the economy as it relates to such factors as inflation, economic output, and employment. Monetary policy affects all kinds of economic and financial decisions people make in this country, whether to get a loan to buy a new house or car or to start up a company, whether to expand a business and whether to put savings in a bank, in bonds, or in the stock market.... [tags: Economics Macroeconomics Business]
1832 words (5.2 pages)
- INTRODUCTION The Malaysia financial system is structure into two major categories it is financial institution and financial market. But I will cover about financial institution only. The role of financial institutions is to resolve the problems caused by market imperfections. Without financial institutions the information and transaction costs of financial markets transactions would be excessive. Under financial institutions there are two type first banking system and non-bank financial intermediaries.... [tags: financial market, risks, institutions]
2136 words (6.1 pages)
- The City of London's Financial Services and Markets 1. The City of London’s financial Services and Markets: The City of London is one of the world’s three leading financial centres, along with Tokyo and New York, and is by far the largest in Europe. While New York and Tokyo rely on very large domestic economies to fuel their business, London’s success can be attributed to its international business. Major financial institutions and markets in the City include the Bank of England, the London Stock Exchange, Lloyd’s insurance market, and the London International Financial Futures and Options Exchange.... [tags: Essays Papers]
2324 words (6.6 pages)
- In recent history, there have been quite a few memorable cases of corporations manipulating financial reports in order to deceive stakeholders. Deceptive accounting practices are like a disease, and should be rooted out immediately. These practices undermine the stability of U.S. financial markets, and can make people less willing to invest in stocks. Financial reporting is the key to maintaining trust in the financial system and any manipulation should not be tolerated. The purpose of financial statements Financial statements are the primary instruments used in assessing the performance of a business and its managers (Gibson , 2013).... [tags: financial reporting, accounting, manipulation]
943 words (2.7 pages)
- Review of Small Business Operations Introduction 1.0. I am a business consultant that has been approached by Asda Plc. I have been requested to make an overall review/assessment of the business operations that will enable the business to improve their current and future operations. Task 1 2.0. Asda is a Plc company which means it is quoted on the stock exchange, which means It must have a minimum of two shareholders; shares can be bought and old with out any restrictions, it also can appeal to the general public to buy shares, it needs a certificate of trading to commence business and the balance sheets and accounts to be presented annually to the Regis... [tags: Papers]
2013 words (5.8 pages)
- Eating Disorders Are Many Different Things
- Dance Schools Are Exploding All Over Australia And The World
- Homelessness Is A Condition Of People Without A Regular Residence
- The Problem Of Social Cost
- My Experience At The Health Care Industry
- Fast Paced World Of Continual Change And Pressure For Responsiveness