I could have $100, convert it into 鈧?9.34, then convert it back the next day to $101. Why do currency rates have to change every day?
Is this somehow helping the economy? Or is it hurting it?Why do currency exchange rates change every day?Ill use the term %26quot;economy%26quot; instead of %26quot;country%26quot;
We see an economy improving and deproving as time goes by. We may not realise it instantly but we come to know of it when the authorities indicate it.
In 2000, Microsoft launched Windows XP, and now we see Windows Vista in Markets 6 years later. Does this mean thatit took Microsoft 6 years to improve its company. The answer is no, after Xp launched, every day people went into markets andd bought the software, and hence Microsoft retreived great amounts of revenue in short amount of time.
We dint see it instantly but we realised it 6 years later.
This was just an example of a short scale business firm. An economy is based on large scale. If In Australia, new companies are built then then the GDP. gross domestice product will increase, which will cause the currency of Australia to raise in behalf of other economy's
If the currency of an economy raises then the currency of the other economy decrease and hence we find ourselves on the way to equilibrium.
It is not related to hurting or helping about an economy. The change iin currency rate day by day helps the economists to realise which economy is experiencing the maximum economic growth.
Hope that helps mate!!Why do currency exchange rates change every day?Do currency rates ever %26quot;close%26quot; like markets? They seem to be updated minutely online. How and who's setting the rates?
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Why do currency exchange rates change every day?like oil people speculate about the prices ans buy sell large amonts which alters rateWhy do currency exchange rates change every day?xchnge rates are based on relative currency values of each country. the value of the currency is based on economic stability, strength and growth.this in determined by supply of money, inflation, interest rates, consumer confidence, demand, stock stability, government stability, political announcement/decisions, etc!
currency is a commodity. the more people want to buy it, the higher the price, less demand, and price drops!
both. it can be good and bad. small fluctuations are inevitable though. most countries avoid massive fluctuations except they have decided to revalue/devalue currency!Why do currency exchange rates change every day?it changes everyday due to demand and supply. forex traders make business out of it. If your in the export /import business and your foreign counterparts require other currency for international trade usually USD (being the int'l currency) and the alternative currency now which is the EURO it can affect your daily exchange rate, still this is supply and demand.
It can hurt the economy if the central bank is protecting the sudden appreciation of a currency and if speculators are attacking the currency. when central banks protects a currency from a sudden appreciation they normally lose on the exchange. It can be self correcting however if it appreciates and remains at that %26quot;appreciated value%26quot; until the end of fiscal year, the loss will then reflect on the over all performance of the economy.
