Exchange rate exploratory analysis

I attempted to answer the question “Which currency amongst the top currently traded currencies does the US dollar have the best and worst exchange rate against”. My intention with this assignment was to explore data regarding the currency exchange of the dollar to the top eight currencies that are monitored in the world.

Once this information is gathered and organized, someone may be able to make the decision of which currency would be the best currency to exchange for the current price of the US dollar. Depending on the current price of the US dollar in different currencies, someone may or may not exchange their currency for the US dollar or wait for the exchange rate to get better to change their money out.

To obtain this information I used an application that collected information from a variety of currencies covering their exchange information. I predominately focused on using the API from freeforexapi.com but recognize that there are several other methods to effectively collect this data. Using this information, I found that the currency that had the smallest amount of power against the US dollar amongst the most important 8 currencies was the Japanese yen sitting at a whopping 147 yen per us dollar. The currency that had the most amount of power against the US dollar was the British pound which sat around a value of .85 pounds per us dollar.

I felt that this information really would be useful for some researchers and foreign exchange traders who need to periodically know the value of other currencies against the US dollar at any given moment. It would also be important to consider the potential that there could be external factors that influence the way that varying currencies perform such as social impacts, policy decisions, and natural occurrences such as flood, drought, or famine. Whilst the trends around currency are difficult to conclude absolutely, I think that this data would be of importance to many in this field and would help them understand the state of currency exchange with little context. I would be curious to see how a more economic or politically focused approach would utilize this data to make a variety of decisions.

While I was exploring this data there were some things that hindered me from understanding what the data was showing. Those things were things like understanding which currency pairs were supported within the API. Not every currency or currency pair was supported so it was important to pay attention to the ones that were and if they were relevant to my intentions with the data. To get the data ready for my intentions all I did was make sure it was the currencies that I wanted to analyze, and make sure that the data was being ready properly by my program. What I found was just which currencies had the most and least power against the dollar which I talked about earlier and I think that the main limitation of this analysis was that it didn’t include more currencies, I think that if the API I used was more extensive and was able to show a lot more details about the currency, that I could have done some deeper analysis.

GitHub link : INST414/Assignment 1.py at main · Ty-Barker2/INST414 (github.com)