Category: General Article

Currency Exchange Rate

Currency Exchange Rate

The exchange rate of currencies in one country is usually a measure of the level of an advanced economy or not a country. In addition to inflation and interest rates.

Currency value plays an important role in trade between countries. Especially when many countries are involved in the activities of the free market economy. The existence of this currency exchange rate affects the profit or return of the investment portfolio.

The exchange rate of one country’s currency with another country is different. This will also affect trade activities between the two countries. When a currency exchange rate strengthens, it will cause the value of state exports to be more expensive. Conversely, imports from other countries actually become cheaper. And vice versa.

What affects the exchange rate of a currency? Well, here are some things that can cause currency exchange movements between two countries:

Different Inflation Rate Between Two Countries

Generally, a country that has a low stable inflation rate has a stronger exchange rate. Compared to countries with high inflation. This is due to the purchasing power of the currency will become larger than other countries. Countries with low inflation include Germany, Japan, Switzerland, the United States and Canada.