Study on Financial Physics in Exchange Rates Using Neural Network and Statical Simulations

Exchange rates play a vital role in a country's trade practices, which is critical to every free market economy in the world. Therefore, these rates are often among the most analyzed and manipulated economic measures. It is the rate that one currency can be exchanged for another between nations or economic zones. Therefore, it can be used to determine the value of various currencies in relation to each other. It is critical in determining trade and capital flow dynamics.

The data on exchange rates between USD/EUR and USD/KWR were taken from the Wall Street Journal Exchange Rates data. It contained the prices from 2013-08-19 to the current date. Although it included the day's open, high, low, and close prices, only the open price was used for this analysis. In this research, the data exploration provided descriptive statistics of the timeline values, including each column's minimum, maximum, average, and interquartile ranges. The data collection served its purpose since it provided a valuable overview of the distribution of the rates. The exchange rate of each currency was plotted, and the data was determined using visual histograms and line graphs. The line graph further provided a clear view of the movement of the rates over time.

Furthermore, the histogram presented data to show that the rate was common - the USD/EUR rate was mainly between 0.85 to 0.90, and the USD/KWR rate was mainly between 1100 and 1180. The EUR rate increased from 2015 until 2017 and peaked again after 2022. The KWR rate has also fluctuated but peaked again after 2016 and 2020 and is currently peaking.