Earning Money as an Investors
* The currency of a growing economy with relative price stability and a wide variety of competitive goods and services will be more in demand than that of a country in political turmoil, with high inflation and few marketable exports.
* Money will flow to wherever it can get the highest return with the least risk. If a nation’s financial instruments, such as stocks and bonds, offer relatively high rates of return at relatively low risk, foreigners will demand its currency to invest in them.
* FX traders speculate within the market about how different events will move the exchange rates.
For example:
News of political instability in other countries drives up demand for U.S. dollars as investors are looking for a "safe haven" for their money.
A country’s interest rates rise and its currency appreciates as foreign investors seek higher returns than they can get in their own countries.
Developing nations undertaking successful economic reforms may experience currency appreciation as foreign investors seek new opportunities.
No comments:
Post a Comment