Question

(1) What are the market fundamentals that influence the determination of exchange rates under a floating exchange rate system?

10/19: ¥109.00: $1; 10/20: ¥109.20: $1; 10/21: ¥109.70: $1; 10/22: ¥110.00: $1; 10/23: ¥110.50: $1

(2) Explain how you would get a 60-day MA of the exchange rate on October 23.

Answer 1

Question -(1) What are the market fundamentals that influence the determination of exchange rates under a floating exchange rate system?

Answer- In a floating exchange rate system floating rates is determined by open Market by supply and demand on global currency market.

It means if the if the demand for a currency is more tthen it's value will increase and if the demand for a currency is less then it's value will decrease/fall/ be less.

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