Measuring the Impact of Exchange Rate Change on the Values of Financial Markets; Analyzing of Sample Indexes from the International Financial Markets

  • Ziad Tariq Shukry قسم العلوم المالية والمصرفية، كلية الإدارة والاقتصاد، جامعة دهوك، اقليم كوردستان-العراق
Keywords: CAC 40, S P500, DAX 30, NIKKEI 225, FTSE 100

Abstract

The objective of the study is to examine the extent of the relationship between exchange rates and financial markets and the degree of impact, and how they differ from one country to another, by testing the exchange rate changes of a sample of developed economies in Asia and North America and France, Germany, England, Japan, America) by testing the change of the euro and the pound sterling and the yen against the dollar and vice versa changes of these currencies on the US market for the period from 1/1/2014 to 1/10/2014 on a daily basis as these global markets have become affected by each other because of the great progress ICT and the development of brown Infrastructure and the spread of financial globalization; so countries seek to maintain the relative stability of the exchange rate because stability in exchange rates is important for the economy, which contributes to increasing investor confidence, whether direct investment or indirect and Batalli influence in financial markets on the grounds that the financial markets are Mrap economy. The importance of this study is the effectiveness of the exchange rate in the global economy, whose markets are of a global nature, which govern the relationship and trade exchanges between countries and the interdependence of world trade, which gave this exchange rate importance because of its effects on the economy and the financial market alike. The study found that there is a differential effect on exchange rates in the indices of financial markets. The sample of the study varies from country to country. There was a strong correlation between the US market and the Japanese market, where the correlation between the SP 500 (USA) and the NIKKEI 225 (Japan) reached more than 0.5, which indicates the volume of bond between the two markets. If the rate of impact is more than 48%. On the other hand, there is an inverse relationship between the French market, which is the CAC 40 index and the Japanese market index if the correlation level is more than 0.08.

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Published
2019-08-25
How to Cite
Tariq Shukry, Z. (2019). Measuring the Impact of Exchange Rate Change on the Values of Financial Markets; Analyzing of Sample Indexes from the International Financial Markets. Journal of Duhok University, 21(2), 437-454. Retrieved from https://journal.uod.ac/index.php/uodjournal/article/view/358