Understanding Currency Trading and Exchange Rate Dynamics Free Essay Example

Economics notes

Currency Trading – Those Who Sell Canadian Dollars to Buy Foreign Goods Legal Currency – Most Expensive Exchanges, Much More Canadian Dollars, People Are Starting To Sell Them Canadian Dollars – Canadian Dollars Exchange Rate Due to Imports Imports (Supply) – An increase in Canadian Imports means an increase in quantity Canadian Dollars Down Supply – The price of Canadian imports in foreign goods price – The higher the currency Canadian Dollar Supply Curve – Canadian Dollar Supply Amount and Currency Relationship between Rates Market Equilibrium – If the exchange rate is too high, demand is greater than demand Equilibrium occurs CAD Changes in Demand – Demand for Canadian Dollars changes as follows: World Demand for Canadian Exports World Demand for Canadian Exports Global Exports – Inc.

Increase demand for Canadian dollars and swipe right Canadian interest rates by foreign currency. Expected Future Exchange Rate – Expected Future Currency Increase Increases Income from Holding Canadian Dollars, CAD Demand Increases CAD Supply Changes – When Supply Changes: Canadian Import Demand – Canadian Rate 4 Rates 4 Foreign Import Demand – Increase in Supply Canada Increases Canadian interest rates to foreigners – Difference in Canadian interest rates reduces the supply of Canadian dollars Hope for futures exchange rate – Loss of future exchange rate expectations means that people can make less profit from holding money – Selling Canadian coins they choose Currency change – Demand for Canadian dollars shifts to the right, supply remains unchanged, then exchange rate increases – Supply of Canadian dollars moves to the left and demand remains.

Meanwhile the exchange rate is rising