Determination of Forex exchange rates:
1st Balance of Payments
a. If payments by one country on its imports of goods and services, two possibilities arising
b. Foreign currency payments exceed income and there is a deficit. This puts the national currency of the country under the downward pressure on foreign currencies.
2nd Supply and demand
3rd Purchasing power parity
4th Interest rate, again relating to foreign trade
5th Relative income levels
6th Market expectations - developments in the political and economic issues. The Count
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