ABSTRACT
The purpose of this research is to analyze the relationship between a country's currency and their total imports and exports. Theoretically, a currency's flotation in value will influence the net imports or exports for the related nation. A currency that is appreciating in relation to others with cause more foreign purchases, and therefore, an increase in imports and a relative decrease in exports. To analysis this, the currency exchange rate data and international trade data for the corresponding twenty-one nations, for the past seventeen years, was mathematically and graphically examined. When analyzed, the correlation coefficients for the net exports and exchange rates extended from -0.896 to +0.945. This wide range would generally reflect a weak or nonextant relationship, however, some correlations appeared to be tarnished by different external environmental factors and, with further analysis, and deviations from a positive correlation could be partially justified. Based upon this research, no definitive conclusion can be made on the validity of the exchange rate and net export relationship.
Keywords
Foreign Exchange Rate, International trade, International Business