what makes a currency go strong?

Answer 1

Above are correct, Interest Rates can also affect the strengh of a currency in the world market.

Answer 2

LOL - go strong?

If you've spent even one day in the FX market, and I've spent more than my share of days in it, you'll know that there is really not a constant, predictable pattern as for which currencies are going to rally and when. However, traders and analysts have 2 methods of tracking a currency - technical analysis and fundamental analysis.

Technical says that all of the previous prices of the currency from that year, month, day, hour, etc., will give the best possible prediction of future prices. Technicians look at price patterns and often use mathematically derived indicators for this purpose. Thus, even though the USD really didn't have any great earth-shattering news in the last month or 2 and the Fed isn't like significantly more hawkish than before, the GBP/USD fell from 1.91 to like 1.85 (back up to about 1.87 now) within a short period of time. If you had looked at the techs you would've seen what is known as a 'bearish-cross' on the daily stochastics for that pair at that time and so the currency, being overbought, fell and fell quite a ways.

Fundamental says screw the techs, all that matters is economics, politics, and any news based on these areas. Thus, when the Bank of England had a surprise 25 bp raise back a little while ago, the pound took off like 100 or 200 pips. It was unexpected and profound (at the time).

Anyhow, there's not enough room here to give you the lesson you need about this topic and I'm reminded of the old saying "those that know don't need to be told, those that don't won't listen anyway".

Answer 3

Good government, good economy, peaceful society make currency of a country go strong!

Answer 4

Supply and demand.