Assignment on Currency Trading

Group Information:
NAME ID
Labib Arifeen 1821108030
Ashfaq Hossain Fahim 1631546630
Mahmud Ur Rahman Saad 1712617630
Md Redoy Rahman 1621510630
Nishat Alam 1811275030
Sumona Islam 1821444630

Submitted to:

Dr. Tanvir Nabi Khan,

PhD in Finance & Risk (University of Nottingham, UK)

Assistant Professor, Department of Accounting and Finance.

The currency market, often known as the foreign exchange market (forex, or FX), is the largest
investment market in the world and is still growing. In this assignment we are going to act
according to currency trader. We are US-based currency trader. We have 10 million USD. So, the
initial value of the portfolio is $10,000,000. And at the end we will see and evaluate our
investment. We have invested five at currency. Those Five currency are

 Euro (EUR): The euro is the official currency of 19 of the EU's 27 member countries,
making it the most widely used currency in the world. After the United States dollar, the
euro is the second-largest and second-most actively traded currency on the foreign
exchange market.
 British pound sterling (GBP): GBP is the Abbreviation for British Powder Sterling, United
Kingdom Official Currency, South Georgia's British Overseas Territories, South Sandwich
Islands, British Antarctic Territory, and the United Kingdom Crown Island Dependencies,
and the Channel Islands. Aside from the United Kingdom, Zimbabwe is an African country
that employs the pound. There are many more currencies, including pounds from the
Falkland Islands, pounds from Gibraltar, pounds from Helen, pounds from Jersey, pounds
from Guernsey, pounds from Manx and Scotland.
 Canadian Dollar (CAD): The Canadian dollar is the world's fifth-largest reserve currency
behind the US dollar, euro, yen, and pound sterling. The dollar is popular among central
banks, due to the relative economic health of Canada, the strong position of the Canadian
government, and the stability of the law and politics of the country.
 New Zealand Dollar (NZD): The NZ dollar is the official currency and legal tendering of
the Pitcairn Islands of New Zealand, the Niue Islands, Ross Dependency, Tokelau, and the
United Kingdom. In New Zealand, the dollar symbol ($) is almost often abbreviated, with
"NZ$" sometimes used to distinguish it from other dollar-denominated currencies.
Concerning the currency trade, the "Kiwi" or "Kiwi dollar" is rarely casually referred to
since New Zealand is usually linked with the Kiwi and the one-dollar coin shows the native
bird on its reverse.
 Turkish lira (TRY): The lira, along with the associated Europe and Middle East currencies,
is rooted in the old Roman weight unit known as the pound that referred to the pound of
silver in Troy. The use of the Roman Libra carried the currency across Europe and the Near
East, where it continued in the medieval era. The current descendants of the historical
 currency are the Turkish lira, the French livre, until 1794, the Italian lira (until 2002), and
the British pound, the translated version of the Roman Libra; the words "pound" still
referred to as "lb." as a unit of weight.

We invested USD to these currency at August, 1, 2021. In terms of Euro, we invested 2000000
USD to Euro. The Bid price was 0.84257 and we get 1685140.0000 Euro. In terms of GBP, we
invested 3000000 USD to GBP. The Bid price was 0.71918 and we get 2157540.0000 GBP. In
terms of Canadian Dollar, we invested 2000000 USD to CAD. The Bid Price was 1.24719. And
we got 2494380.0000 CAD. Next In terms of New Zealand Dollar, we invested 2000000 USD to
NZD. The Bid price was 1.43236. And we got 2864720.0000 NZD. Lastly, we invest 1000000
USD to TRY and The Bid price was 8.44137. And we got 8441370.0000 TRY.

This is our new currency portfolio:

Currency Initial investment in USD Aug 1, 2021 Buying Price

EUR 2000000 1685140.0000

GBP 3000000 2157540.0000

CAD 2000000 2494380.0000

NZD 2000000 2864720.0000

TRY 1000000 8441370.0000

 USD To other Currency
9000000
8000000
7000000
6000000
5000000
4000000
3000000
2000000
1000000
0
EUR GBP CAD NZD TRY

Initial investment in USD Aug 1, 2021 Buying Price

From this Graph, we can see that, the initial investment in USD. And after then how much can
we buy our selected currency. Here we can see that we got less amount of Euro, GBP at august 1
buying. But in terms of CAD, NZD we got slightly higher amount of CAD and NZD. Lastly we
got huge amount of TRY against USD.

End of the investment USD

Currency Initial investment in USD value
EUR 2000000 1992492.6846

GBP 3000000 2969098.6710

CAD 2000000 1977619.2954

NZD 2000000 2021375.0792

TRY 1000000 1015581.2247

After 1 month later in September 1, 2021, we again convert those five currency in USD. Now, in
terms of Euro, the ask price is in September is 1.18239 and we have1685140.0000 EUR. Then
after one month, we have got 1992492.6846 USD which is less amount against our initial
investment. That means after one month USD has depreciate against EUR.
Now, In terms of GBP, our initial investment was 3000000 USD. We have 2157540.0000 GBP
and the Ask price in September is 1.37615. And after one month we have got 2969098.6710 USD
which is little less than our initial investment. That means again USD depreciate against GBP
within the one month.
In terms of CAD, we have 2494380.0000 CAD and in September the ask price is 0.7928. Our
initial investment was 2000000 USD. And after one month we have got 1977619.2954 USD which
is also a bit less than our initial investment. That means again USD depreciate against CAD within
the one month.
In terms of NZD, we have 2864720.0000 NSZ. After one month in September the ask price is
0.70561. Our initial investment was 2000000 USD. And after one month we have got
2021375.0792 USD which is a bit higher amount than our initial investment. That means USD
appreciate against NZD within the one month.
Lastly, In terms of TRY, we have 8441370.0000 TRY. After one month in September the ask price
is 0.12031. Our initial investment was 1000000 USD. And after one month we have got
1015581.2247 USD which is also a bit higher amount than our initial investment. That means USD
appreciate against TRY within the one month.

Comparing initial investment to End value (USD)

of investment
Initial investment in USD End of the invesrtment USD value

3500000
3000000
2500000
2000000
1500000
1000000
500000
0
EUR GBP CAD NZD TRY

From this graph we can understand the initial investment and how we got at the end of one month.
For Euro, GBP, CAD we had higher investment which is not good for and currency trader. And
for NZD and TRY we got some sort of profit that means our initial investment was lesser than our
end value of the investment. We got profit here. But unfortunately, we invest less amount of
money on that.
The holding period return:
 𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑡ℎ𝑒 𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜 𝑖𝑛 𝑈𝑆𝐷 𝑎𝑡 𝑡ℎ𝑒 𝑒𝑛𝑑 𝑜𝑓 𝑡ℎ𝑒 ℎ𝑜𝑙𝑑𝑖𝑛𝑔 𝑝𝑒𝑟𝑖𝑜𝑑 − $10,000,000
$10,000,000

$9976166.9549 − $10,000,000
$10,000,000
= -0.00238330451
= -0.2383%
Our holding period return is -0.2383%. In currency trader perspective it was not a profitable
portfolio investment. If we could invest in NZD and TRY most or other potential currency then
we might got some sort of profit in our portfolio. We can avoid this loss by implementing some
strategy which are: We needed to keep record on our investment portfolio regularly. We needed
to keep eye on Tax Impact and Treatment. We needed to practice more on this currency trading.
And lastly we should start with more small investments.