Assignment Task

Your task is to address the following questions:

1. Analyze the recent exchange value dynamics of AUD/CNY, AUD/USD, and EUR/AUD currency pairs since January 2019, considering global events such as the COVID-19 pandemic and the Russia-Ukraine War. Assess the impacts of these events on the movements of the currency pairs.

2. Evaluate whether CNY, EUR, and USD are performing better or worse than AUD in current global market conditions and future economic prospects. Based on your analysis, devise a capital investment plan, including a hedging strategy for Australian multinational corporations (MNCs) operating in China, the eurozone, and the United States.

3. Provide recommendations for Advanced Power Pty Ltd to maintain its market share in Italy despite the recent strong AUD against the euro, considering competition from German and French portable generator makers.

4. Conduct an analysis and offer suggestions for hedging foreign exchange rate risk associated with an order from a large wholesaler in Germany received by CSL Limited. The order is for AUD3,200,000 of products, conditional upon delivery in three months and invoiced in euros.

Additional Information:

• Spot rates on April 26, 2024: AUD to EUR - 0.6743, AUD to CNY - 4.7418, AUD to USD - 0.7095.
• Three-month forward rates: AUD to USD - USD0.69737/AUD1.00, EUR to USD - USD1.06246/EUR1.00.
• Options information: Strike price for a 3-month put option is AUD1.5105/EUR1.00 at a premium cost of AUD 0.0358 per EUR, and for a 3-month call option is AUD1.5195/EUR1.00 at a premium cost of AUD 0.042 per EUR.