Using the interest rates above, calculate the implied forward bid, ask and mid rates for the currency pairs in Table 4 . You must then calculate the value of your FX portfolio at the end of June using the calculated bid/ask rates. Report the expected value of your position in each currency in the position summary in Table 2 . Finally, you must calculate expected profit/loss on your portfolio in AUD [1 Mark]. The AUD value of the net expected position must be calculated using the estimated mid rates.
Comm / Terms Bid Ask Mid
AUD/USD
AUD/EUR
EUR/AUD
AUD/GBP
GBP/AUD
AUD/JPY
EUR/USD
GBP/USD
USD/JPY
EUR/GBP
EUR/JPY
GBP/JPY
AUD/CAD
EUR/CHF
GBP/CHF
USD/CHF
USD/CAD
NZD/USD
Implied forward rates at the end of June 2021. Mid rate = /2
Explain your final portfolio position to the senior manager. Given the implied forward rates for June, discuss whether your speculative positions will generate profits for the company. You must explain ending positions for each currency in your portfolio? Do your portfolio have any exposure to exchange rate risk? What recommendations, if any, will you make to the senior management?
