Question

Hi

My question is how to analyze currencies market? What the factors that effect the curruencies value ?

According to the last two months what is the main reasons for changes in currencies?

I will be glad if you discuss your answer with dates during last 2 months to understand clearly :)

Thanks all , eagerly waiting !

Answer 1

Different countries have different currencies which are used to carry out trade. The world has now become a global village with all the countries trading among themselves. The liberalization policy has made the world a small marketplace that is within the reach of everyone. So, the currency market is also known as foreign exchange market or Forex market. The trade is being done among different countries but the value of the currency of one country is not the same as the value of the currencies of another country. Hence, a common base currency has to be decided in which terms the other currencies will be converted. This common currency is US Dollars. All currency values are converted to US Dollars so that the value of the transaction can be analyzed. This means that the currency value fluctuates. This fluctuation is due to a number of factors like demand and supply of the currency, monetary policy and fiscal policy of the country, global trends, investments in the country etc. For example: The Brexit negotiations had an impact on the value of British pound, the testing of nuclear bomb by North Korea led to political uncertainty in US and the value of US Dollar fell.