International trade as a power affecting currency quoting

Оlena Baula and Yulia Sarzhan

E-Forum Working Papers, 2022, vol. 12, issue 1, 80-89

Abstract: The phenomenon of the exchange rate, as the basis for foreign economic activity, is one of the main features of the current stage of development of world economic relations. Currency quotation, as a direct mechanism for implementing and servicing the exchange rate, is a critical area of macroeconomic policy for each country. Therefore, the study of the influence of traditional factors of exchange rate formation is an important source of information on the state of the national economy in general, and its strategic orientation in particular. The British pound sterling is the oldest currency in the world that is still in circulation. In the Forex market, transactions with the British pound are among the largest in volume. These facts determine the convenience of choosing this currency as a basis for economic and mathematical analysis. The main purpose of the study is to analyze the basis of the correlation of the quotation of the pound sterling in relation to the indicators of foreign economic activity of the country; identification of the impact of changes in foreign economic activity on the currency quotation of the British pound; identification of the impact of Brexit on the correlation of the currency quotation of the British pound and the country's foreign economic activity in relation to the analyzed counterparties; comparison of the received economic-mathematical and logical tendencies. To achieve this goal, a set of general scientific and special research methods was used, the application of which ensured the soundness, objectivity and reliability of the provisions presented in the article and the conclusions formulated. In particular, the following methods were used: systematization and generalization, scientific abstraction and explication, analysis, induction, econometric modeling, methods of descriptive statistics and visual analysis. The article examines the peculiarities of the impact of changes in foreign economic activity on the currency of the British pound against other currencies of the SDR basket, including the Japanese yen, Chinese yuan, US dollar and euro. The influence of Brexit, as a critical moment in the country's foreign economic activity, on the correlation of the currency quotation of the British pound and the country's foreign trade relative to the analyzed counterparties is revealed. The obtained mathematical and logical tendencies of economic-mathematical analysis are also compared. The article substantiates the expediency of conducting the monetary policy of the state, based on the indicators of foreign economic activity of the country, taking into account the peculiarities of the history of exchange pairs and current market conditions. The results of the study can be useful for developing scientifically sound recommendations for improving the country's monetary policy

Keywords: exchange rates; currency quoting; international trade (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:cuc:eforum:v:12:y:2022:i:1:p:80-89

DOI: 10.36910/6775-2308-8559-2022-1-10

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