1) I would like to ask what drive exchange rate of currency up and down?
2) How George Soros made those Asian currencies to depreciate?? I know he used some derivative tools to do it but how??
Please elaborate on the answer. Thank you.|||What a great question.
Truth is, no one can give you the whole answer to that question, but there are two main factors, if we decide to forget about the unexpected things that happens, such as terror and its like.
Basically it is demand and supply, If the demand is higher than the supply the currency will rise, and opposite. Then what drives supply and demand? Interest rates is one thing, deficit in the trade balance, investments in a country, and other things like that.
Another factor to take into consideration is the expectancy of the future development in the country.|||George Soros has nothing to do with it. Inflation drives the value of currency.
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