Learn to invest in Foreign market
Investing in foreign currency always feels like its exclusively for the small portion financially fit person. But Now it's not the case, Now there are lots of forex trading tips and tools by which we can personal freedom to quickly, easily and conveniently put some of your precious savings in foreign currency – it’s all connected to your online banking and is quick and simple to use. As you can choose from 17 different currencies including the dollar, euro, and pound.
Some Factor affecting currency movements
Export and Import
This is the calculation of a country’s export from its import. when country’s import percentage is higher than an export percentage, the term has a negative impact called the trade deficit. But reverse of this mark a positive impact on nation trade and strengthen country’s economy.
Political Effect
Another Factor is the political climate of the country, political stability especially, in emerging economies, is very important. For example. A political decision to leave the EU ended up having huge ramifications on the pound.
Inflation Effect
Inflation also plays a major role in fluctuation in currency rate. If inflation is stable or relatively lower then your currency will be strong. South Africa’s inflation rate is relatively higher than that in the US, that’s why the rand is weaker than the dollar.
Why do some countries’ currencies fluctuate while others don’t?
Most countries have no exchange control, that’s why their currencies fluctuate in relation to the dollar. Countries like South Africa operate a flexible exchange rate system, which means the value of the rand is determined by the market forces of supply and demand. The demand for a currency relative to the supply will determine its value in relation to another currency.In some countries, you have fixed exchange rates, like the United Arab Emirates, for example. Their dirham is pegged to the dollar, meaning it doesn’t have flexibility at all. Such countries have very stable and predictable economies. Not a lot of countries have fixed exchange rate systems – it’s mainly oil-producing countries and ones with small populations.
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