2006-09-09 05:53:29 · 3 answers · asked by sunil 2 in Business & Finance ➔ Investing
The world had to create a form of payment. Prior to curency people exchanged goods as a method of payment. However, a person needing one chicken and exchanging it for cow was not fair. Therefore currency was created. First it was based on gold (i.e. One ounce of gold per one chariot, etc.) Then other countries developed their own curency and so through the ages we now have Euros, Dollars, Yens, etc.
Each country has a rating of their currency. It is a complicated fomula (sorry I do not remember it) but it goes something like total gold reserves versus outstanding currency and foreign debt. It is compared with stronger economies and the exchange is set daily.
2006-09-09 06:03:46 · answer #1 · answered by boricuaviajero 2 · 0⤊ 0⤋
Foreign exchange works on simple supply and demand rules, that is the local supply of hard currency verses the economic demand of the currency and economic strength of the country whos currency it is, the gold reserves will also affect the daily exchange rate, but the main factors affecting the rate is the balance of payments (International trade)situation for each country, domestic (GDP/GNP) product and also the current trade account debit or credit situation in US dollars and other hard currency. Exchange rates can be affected by any factor involving the Global stock markets, such as War, Energy(oil), House prices, and various other factors.
2006-09-09 06:23:49 · answer #2 · answered by Latin Techie 7 · 0⤊ 0⤋
Try the links in http://www.hot8sites.com/trading/
2006-09-11 06:36:55 · answer #3 · answered by Anonymous · 0⤊ 0⤋