product is price inelastic

more attractive as buying things in foreign currencies is cheaper

curve will be steep

increase in supply of pound

increase in UK incomes

speculation

excess demand

price of currency adjusts until demand = supply

value of pound falls

compares actual FX rates with what it needs to be to keep prices of burgers in diff countries comparable

purchasing power parity

price elasticity

overseas market competition

proportion of sales exported

proportion of inputs imported

degree to which currency value has changed, & what direction, relative to exports & imports

availability of alternative markets to export to or import from

increase in demand

if UK exports = very price sensitive

factors which impact price elasticity

high increase/ decrease in demand with significant price changes

low increase/ decrease in demand with significant price changes

no currency conversion transaction costs

do not need to worry about fluctuations within the Eurozone

greater stability

easier planning

easier to compare prices of suppliers

lose control over domestic country

accepting increases/ decreases in interest rates set by ECB

value determined by market or supply & demand

managers concentrate on markets they sell to and buy from

low demand

high demand or fall in supply

or can be fixed by the government

impacts exports

impacts imports

monitor the fluctuations and anticipate changes important as its not controlled by one person

exchange rate is an example of PESTLE factor

offset FX changes in one market with another

reduce impact of FX changes

use future markets

speculate to offset movements

set contracts in own currency

pound increases relative to overseas market

pound price remains the same = exports are cheaper

pound falls relative to overseas market

fix value

buy own currency using foreign currency reserves

high rates attract overseas investors

increase the price

increase in price