Economics & Finance (Forex)

You are a FOREX dealing team working for a large Singapore bank or a large Singapore Corporation. The goal of the assignment is to paper trade foreign exchange over a period of five consecutive days in either (11/03/2013 to 17/03/2013.


The report should not exceed 2,500 words in total. This excludes the table of reference and reference list. The document should be formatted following the guidelines below and presentation guidelines:

  • Text should be justified
  • 1.5 line spacing
  • Character  size 12 point
  • font, Times New Roman,
  •  1”margins.



  • References should be presented using the Harvard (author-date) referencing system. This would be presented as a business report to your senior manager.  As such, it should be clear and concise.  Include all relevant information, but only relevant information.


  • You are the treasury team for your company.  You are free to make any decision that you believe will benefit your firm.  However, you must be able to explain and justify your actions and convince your Senior Manager that you did a good job.

We are expecting you to follow the exchange rate closely over the period that you will develop your trading strategy



Content of the Reports

The following structure and guidelines are provided to assist you in writing your reports.

Executive summary or synopsis

  • Your report must include an executive summary or synopsis.
  • What is the name of your organisation?  Are you a bank or a corporate?  What are your objectives?  How do you plan to achieve your objectives at the beginning of the dealing session?  What factors do your particular team need to take into account in trying to achieve your objectives?


Body of Report (Do not use “Body of Report” as a heading)

Market view

  • You are required to conduct some research before forming a view about current and future market conditions.  Do you think that exchange rates will go up or down in the next 3 to 6 months?  What are the reasons behind your views?  As a starting point, you can first identify the economic factors  (GOVERNMENT INTERVENTION, INFLATION, INTEREST RATE & STABILITY OF ECONOMY) that influence the foreign exchange rates (check the lecture notes/textbook).  Using the most recent media releases, you will identify which economic factor(s) will influence the exchange rates. You must rely on both domestic and international financial news. Students are required to select two pairs of currencies for formulating their market view (e.g. SGD/USD and GBP/JPY).


  • Do not simply quote other people’s opinions. You should present your opinion, and explain in your own words why you hold that opinion in a way that shows that you understand the theory behind the determination of the exchange rates. You can certainly quote evidence that supports your opinion, and this evidence must be correctly referenced (do not submit copies of your collected articles with your report). For your view you should use at least five references.

Very important: you should do some research and discuss your market view prior to developing your trading strategies.


Trading strategy

  • First explain how you intend to achieve your objective.
  • Given your view about current and future market conditions, you should devise a strategy that you will try to implement over the 5 days of trading.  This strategy will specify how you will go about achieving your objective in a way that benefits your organisation – which currencies you will buy or sell.  Where appropriate you should also devise a speculation strategy which will allow you to create a portfolio of currencies which will enable your organisation to take advantage of your predicted changes in the exchange rates.
  • What do academics think about this?
  • The market view and your strategy are critically important components of the report.  You will not get a passing grade on the report without these components.


Performance analysis

  • Discuss what actually happened during the five-day session.  Were you able to stick to your strategy?  Why or why not?  Did you achieve your objectives?  Why, or why not?
  • Record all your paper trades over that trading period. Use the output from your accounts section to discuss your performances: what are your final positions, realised profit or losses, average rates, etc…. Ultimately, to what extent have you been able to complete your objective?
  • Do you feel that you have set up your organisation to take advantage of movements in exchange rates, if they move as you have predicted?  Why or why not?  This is more important than making a profit during the session.  For instance, for the FX session, did you finish up being long or short of on SGD?
  • Can you identify any transactions where you have bought and sold the same currency and made a profit or a loss?  If you were buying a currency, how far were you off your benchmark?
  • If you are a corporate, you are unlikely to make a profit for your objective over the course of the session. They will be profit only if you have bought and sold the same currency.  It is important to comment on whether you have set up your organisation so that it will be able to take advantage of future movements in the rates (minimise cost).
  • Looking at your trade you should explain which currencies you have bought and sold expecting to make a profit in week 11 based on you market view.
  • Justify your actions and your final positions to your senior manager. If you made an error during the session, explain what occurred and what you have learned from it.
  • Analyse the session in terms of how you performed as a team.  How did you divide your responsibilities?  Outline what your learned from the session.  How could you improve in future sessions?
  • A conclusion is compulsory. Failure to present a conclusion will result in loss of marks.
  • Your appendices should include all your dealing sheets, i.e. your paper trades. The appendices. Label appendices clearly and refer to them in the body of the report. Ensure that you include cents in your accounts as every cent must be accounted for.
  • The reference list is compulsory. Failure to provide a reference list will result in loss of marks. The format of your reference list should follow the Harvard referencing style.



Reference List

This assessment enables students to have a practical view about trading FOREX. Students will learn about both domestic and international markets, drivers of FOREX, use the appropriates terms/languages in the field, calculate the profit and loss from their transactions, develop trading strategies, work in a team environment, financial reporting and the financial regulations surrounding this instrument.













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