Even for people that know very little about economics and finances, there is a general understanding that the world’s currencies continually rise and fall in value. There are complex factors that influence a currency’s value and with over 100 official currencies circulating the globe, every single one is in a constant state of flux. Huge movements can impact on a currency’s value yet for the ordinary citizen, the fluctuations don’t always impact their daily life. Despite this, understanding the machinations of both national currencies and the global market is of importance when discussing the value of currencies.
Unpacking & Explaining the Nuances of a Currency’s Value
To help unpack and explain the nuances of this topic, this graphic investigates key events and trends that make currencies rise and fall in value:
- Inflation and Interest Rates
- Balance of Payments
- Government Debt
- Terms of Trade
- Political & Economic Situation
- Market Speculation
- Government Intervention
- Monetary Policy