What factors affect currency exchange rates?

It’s important to note that economic health is a broad term that includes various factors such as interest rates, inflation, and the balance of trade. This decided the future of the GDP of a country among the factors affecting currency exchange rates. 6. Balance of Trade

How is currency value determined?

Currency value is determined by aggregate supply and demand. Supply and demand are influenced by a number of factors, including interest rates, inflation, capital flow, and money supply. The most common method to value currency is through exchange rates. The two main exchange rate systems are fixed rate and floating rate systems.

What factors affect currency value?

On a fundamental level, currency value is determined by supply and demand, both domestic and foreign. Increased demand appreciates the currency value, while increased supply decreases the currency value. Many factors may affect currency value, such as: 1. Interest Rates