What is it that determines the curreny exchange rate?
April 29, 2009 by Currency Trading Tips
Filed under More Currency Trading Answers
Can you answer Tristan Robert Due March 20’s question about Currency Trading?:
For example: I was in Japan for 3 years and the exchange rate was always fluctuating. I saw it go as low as 140 yen to the USD and as high is 95 yen to the USD.
For example: I was in Japan for 3 years and the exchange rate was always fluctuating. I saw it go as low as 140 yen to the USD and as high is 95 yen to the USD.
Help me out. I didn’t pay attention in economics class.
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Currency Trading Feedback: The american dollar gets its value from the price other currency holders and traders are willing to pay for it.
What currency traders are willing to pay for the american dollar is based on a combination of the saving, investing and spending policies by the government, businesses, and individuals in the U.S.
Since americans sustain much of our standard of living based on debt, there should be little surprise that the dollar’s value will be headed downward for some time into the future. This will inspire inflation, which harms most americans.
Currency Trading Feedback: For floating currencies like the US, it’s supply and demand.
For fixed currencies, like China, it’s the government or central bank.
For currencies that have fixed and floating characteristics, it’s a combination thereof.