You are required to produce a report, in two parts, on the bilateral exchange rate of your choice. A) Briefly describe the movement in the bilateral exchange rate of your choice between January 1st 2018 and December 31st 2018 (e.g. EUR/USD or USD/CHF). B) Using any of the theories of exchange rate determination discussed in AC4202 (for example: international parity conditions), what would the predicted exchange rate changes have been over this period? Choose the frequency or frequencies you think appropriate (e.g. monthly, annually). Use diagrams and/or tables to illustrate your answer. C) Briefly outline the reasons why the theory or theories that you selected were (or were not) effective in forecasting your chosen bilateral exchange rate.
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