1. Exchange Rate YuYuan Liu Han Yu Yang Dennis Yue Jessica Chen Jo-Yu Mao

2. Introduction In finance, the foreign-exchange rate between two currencies specifies how much one currency is worth in terms of the other. It has a major impact on a country ’ s ability on importing and exporting, inflations, foreign investment, and foreign debts.

3. Introduction U.S. urges China to open currency exchange in order to balance import and export proportions.

4. Introduction Sets of data Trade-Weighted Index Japan United Kingdom Canada Dates: 1973:01 to 2006:03

5. Trade-Weighted Index

6. Regression on Time For TWI

7. TWI Series

8. Correlogram and Unit root test for TWI

9. First Differencing

10. Correlogram and Unit root test for DTWI

11. Fitting ARMA Model

12. Serial Correlation Test and Correlogram for MAone model Residuals

13. Diagnosis for ARMA model: Residuals Squared Series

14. Conditional Heteroscedasticity test: Correlogram of residuals squared and ARCH-test

15. Forecast of TWI

17. Japan

18. Regression on Time For Japan

19. Japan Series

20. Correlogram and Unit root test for Japan

21. First Differencing

22. Correlogram and Unit root test for DJapan

23. Fitting ARMA Model

24. Diagnosis of ARMA model: residuals graph and histogram

25. Diagnosis of ARMA model: Correlogram-Qstat of ARMA model & Serial correlation test

26. Diagnosis for ARMA model: Residuals Squared Series

27. Conditional Heteroscedasticity test: Correlogram of residuals squared and ARCH-test

28. The Arch-Garch Model

29. Diagnosis for ARCH model

30. Forecasting of Japan

31. Forecast of Japan

32. United Kingdom

33. Regression on Time For UK

34. UK Series

35. Correlogram and Unit root test for UK

36. First Differencing

37. Correlogram and Unit root test for DUK

38. Diagnosis of ARMA model: residuals graph and histogram

39. Diagnosis of ARMA model: Correlogram-Qstat of ARMA model & Serial correlation test

40. Diagnosis for ARMA model: Residuals Squared Series

41. Conditional Heteroscedasticity test: Correlogram of residuals squared and ARCH-test

42. ARCH-GARCH Model

43. Forecast of UK

45. Canada

46. Regression on Time For Canada

47. Canada Series

48. Correlogram and Unit root test for Canada

49. First Differencing

50. Correlogram and Unit root test for DCanada

51. Diagnosis of ARMA model: residuals graph and histogram

52. Diagnosis of ARMA model: Correlogram-Qstat of ARMA model & Serial correlation test

53. Diagnosis for ARMA model: Residuals Squared Series

54. Conditional Heteroscedasticity test: Correlogram of residuals squared and ARCH-test

55. ARCH-GARCH Model

56. Forecast of Canada

58. Conclusion Each of the four set shows a similar posture as against time Foreign exchange rate measures the country ’ s economic strength and currency purchasing power U.S. dollar may stay under pressure in the future year, it probably going to be less demand in Asian market, but it should be doing fine in Europe and North America

59. The End