what is exchange rate?what determines the exchange rates in a country?

Answer 1

In finance, the exchange rate between two currencies specifies how much one currency is worth in terms of the other.

For example an exchange rate of 120 Japanese yen (JPY, ¥) to the United States dollar (USD, $) means that JPY 120 is worth the same as USD 1. The foreign exchange market is one of the largest markets in the world. By some estimates, about 2 trillion USD worth of currency changes hands every day. (1)

The market determines the price most of the time ... however, China has been suspected by some economists to have withheld proper information in calculating some of what drives the market (GDP calculations & other Economic indicators like inflation ... ect.) --- in hopes to outbid many other countries in obtaining business (operations, plants, manufacturing).

The Exchange Rate is similar to stocks; in that we depend on reliable disclosure of Economic Indicators. Changes like natural disasters, contracting major business like Wal-Mart, increased commerce (Trains, Roads, Air Transportation), and war influence the Exchange Rate.

Answer 2

Determination of the exchange rate is caused by a combination of demand for domestic investment along with the supply of currency.

Answer 3

ninety 5% of what drives the foreign places currencies replace marketplace is theory. investors replace currencies attempting to make a earnings, many factors be certain the suggestions investors make. expenses of interest, gold expenditures, oil expenditures, economic alerts and marketplace tendencies are one among quite a few kit investors use to be certain in spite of if or not they think of particular currencies will upward thrust or fall. a pair of million.9 trillion money an afternoon is traded on the foreign places money marketplace, the biggest economic marketplace interior the international. investors purchase or sell in step with what they think of will take place to a particular foreign places money, not inevitably how that foreign places money is at present appearing, and that's in fact what drives the marketplace.