Question

1. Given below are a set of foreign exchange quotes for several currencies against the Australian dollar as of August 5, 2020.

Australian Dollar Exchange Rates

Currency	Sell / buy
US, dollar	0.7143/0.7143
UK, pound	0.5458/0.5459
China, yuan Renminbi	4.9872/4.9907
Hong Kong, dollar	5.5349/5.5364
India, rupee	53.572/53.669
Japan, yen	75.70/75.70
Malaysia, ringgit	3.0104/3.0139
Philippines, peso	34.953/35.135
South Africa, rand	12.2272/12. 2340
Switzerland, franc	0.6551/0.6551
Thailand, baht	22.1892/22.2317

(c) Create a table showing the bid and ask quotes of each of the following currency pairs:

(i) GBP/CHF

(ii) PHP/THB

(iii) HKD/MYR

(iv) JPY/INR

(v) RMB/ZAR

Please, answer all parts (c) and step by step and in clear way

Answer 1

(i) GBP/CHF Bid Rate = GBP/AUD Bid Rate * AUD/CHF Bid Rate

= 0.5458 * (1/ (CHF/AUD ask rate)

= 0.5458 * (1/0.6551)

= 0.5458 * 1.5264

= 0.8331

GBP/CHF Ask Rate = GBP/AUD Ask Rate * AUD/CHF Ask Rate

= 0.5459 * (1/ (CHF/AUD bid rate)

= 0.5459 * (1/0.6551)

= 0.5459 * 1.5264

= 0.8333

Thus GBP/CHF Bid ask rate = 0.8331/0.8333     

(ii) PHP/THB Bid Rate = PHP/AUD Bid Rate * AUD/THB Bid Rate

= 34.953 * (1/ (THB/AUD ask rate)

= 34.953 * (1/22.2317)

= 34.953 * 0.0449

= 1.5722

PHP/THB Ask Rate = PHP/AUD Ask Rate * AUD/THB Ask Rate

= 35.135 * (1/ (THB/AUD bid rate)

= 35.135 * (1/22.1892)

= 35.135 * 0.0450

= 1.5810

Thus PHP/THB Bid ask rate = 1.5722/1.5810

(iii) HKD/MYR Bid Rate = HKD/AUD Bid Rate * AUD/MYR Bid Rate

= 5.5349 * (1/ (MYR/AUD ask rate)

= 5.5349 * (1/3.0139)

= 5.5349 * 0.3317

= 1.8359

HKD/MYR Ask Rate = HKD/AUD Ask Rate * AUD/MYR Ask Rate

= 5.5364 * (1/ (MYR/AUD bid rate)

= 5.5364 * (1/3.0104)

= 5.5364 * 0.3321

= 1.8386

Thus HKD/MYR Bid ask rate = 1.8359/1.8386

(iv) JPY/INR Bid Rate = JPY/AUD Bid Rate * AUD/INR Bid Rate

= 75.70* (1/ (INR/AUD ask rate)

= 75.70* (1/ 53.669)

= 1.4104

JPY/INR Ask Rate = JPY/AUD Ask Rate * AUD/INR ask Rate

= 75.70* (1/ (INR/AUD bid rate)

= 75.70* (1/ 53.572)

= 1.4130

Thus JPY/INR Bid ask rate is 1.4101/1.4130

(v) RMB/ZAR Bid Rate = RMB/AUD Bid Rate * AUD/ZAR Bid Rate

= 4.9872* (1/ (ZAR/AUD ask rate)

= 4.9872* (1/ 12.2340)

= 0.4076

RMB/ZAR Ask Rate = RMB/AUD Ask Rate * AUD/ZAR ask Rate

= 4.9907 * (1/ (ZAR/AUD bid rate)

= 4.9907* (1/ 12.2272)

= 0.4081

Thus RMB/ZAR Bid ask rate is 0.4076/0.4081