Factors Effecting Exchange Rates

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Factors Effecting Exchange Rates

Balance of Payments -

  • A record of all transactions made between one particular country and all other countries during a specified period of time.

  • BOP compares the dollar difference of the amount of exports and imports, including all financial exports and imports.

  • A negative balance of payments means that more money is flowing out of the country than coming in, and vice versa.


Fiscal & Monetary Policy -

  • Government spending policies that influence macroeconomic conditions.

  • These policies affect tax rates, interest rates and government spending, in an effort to control the economy.



Focus on Trade Accounts -

  • An account similar to a traditional bank account, holding cash and securities, and is administered by an investment dealer.

  • An account held at a financial institution and administered by an investment dealer that the account holder uses to employ a trading strategy rather than a buy-and-hold investment strategy


Central Bank Intervention


Inflation Rates


Interest Rates
 
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