|
Well, it's very complex, but I'll try to explain. These are the major factors affecting currency fluctuations:
1.Strength of a countrie's economy
2.Authority of the government issued that currency
3.Supply and demand for the currency
Now the example of the US - this country imports much more than exports, it means that the countries which have export orientation depend on the US and its ability to buy goods. The less $ costs in terms of other currencies the less goods the US can buy. The same explaination for other currencies.
When a countrie's economy faces crisis it always reflects on currency exchange rates.
|