New Zealand Dollar Foreign Exchange Market Analysis

This assignment requires students to analyze the foreign exchange market for the New Zealand dollar. Students are asked to construct a demand and supply graph representing the NZ$ market using the trade-weighted index (TWI) to represent price. The analysis should cover three scenarios: an economic recession in the USA impacting adversely on New Zealand's exports, an increase in New Zealand's interest rate relative to major trading partners, and an expansion of industries in New Zealand competing successfully against imported substitutes. Students are expected to show changes in demand and supply of NZ$ and its impact on the overall value of the currency.