2. What are the forces that might cause a currency’s value to change relative to other currencies?
Among the economic and political factors that affect the value of a country currency are:
* Currency appreciation/depreciation, * Currency rate manipulation * When a currency is fixed (pegged) to the value of another currency * Interest rates & inflation * Speculation.
All of these forces have critical political and social consequences for a country and its trade partners. As mentioned in the last question, there are always losers and winners whenever these factors are involved in the currency control scheme of a