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Factors that have an impact on price movement

 Foreign exchange rates are one of the most closely monitored and analyzed economic measures, and are considered one of the best determinants of the relative economic health of the country, as they affect the real return of foreign investment and the trade balance in any country, and currency exchange rates change due to many different factors that are It has either a direct or indirect effect, so we will explain the most important factors that have an impact on the movement of currency exchange rates:

Exchange company:

When you buy or sell foreign currency in exchange for the local currency, where the person goes to the bank or exchange company, and in turn hangs electronic boards displaying the price of a group of currencies, and when going to the employee to buy or sell, he asks about the price of the currency, for example if someone wants to The Hashemite Kingdom of Jordan to replace the euro, whether selling or buying, so he asks the employee how much is the euro today? What raises the question What are the factors affecting the currency exchange rate? But if he wants to exchange a US dollar against the Jordanian dinar or vice versa, then he is most likely not to ask, because of the dinar’s link to the dollar, and any rise or fall in the dollar against other currencies will have the same effect on the dinar, and during the article the factors affecting the exchange rate will be explained.

 exchange rate:

 It considers the price at which one currency is exchanged for another, and the exchange rate is the value of one country's currency in relation to another currency, for example the Japanese yen exchange rate against the US dollar between banks equals 114 yen, this means that 114 yen will be paid to obtain US dollars One or one US dollar will be paid to get 114 yen, and this process is called the exchange rate, and the exchange rate is determined in the foreign exchange market, and an open market for a wide range and different types of sellers and buyers is known in the forex market and in the retail currency exchange RFED market, the selling price is determined. The purchase is by money merchants, and most exchanges are to or from the local currency and the purchase price is the price at which money traders buy the foreign currency and the selling price is the price at which they sell that currency.

Foreign exchange market:

The foreign exchange or forex market is a global network across the Internet, through which traders buy and sell currencies, as traders are fully aware of the factors affecting the currency exchange rate, and the forex market determines the exchange rate of floating currencies, and for this market The first two levels, the interbank market and the second is called OTC trading, which is the place where companies and individuals trade, and in the currency market, the trader can buy the currency at today's price in the spot market and sell the same amount in the forward market, and the tools available to the trader such as the economic agenda help him By identifying and anticipating the factors affecting the currency exchange rate.

 Factors affecting the currency exchange rate:

Where the exchange rate is considered one of the most important things to determine the level of soundness of the economy, as the exchange rate plays a prominent role in the process of trade exchange between countries, there are a number of factors affecting the currency exchange rate that inevitably affect the country's economy, and the exchange rate is crucial to the market economy The free world and the following points will explain the factors affecting the currency exchange rate.

 Economy power:

Where stable countries are the first choice for the investor, to invest capital, and any country with this positivity will attract investment funds from countries that suffer from economic and political risks, as political turmoil loses confidence in the currency.

Interest rate:

As interest rates, inflation and currency exchange rates are closely related to each other, through maneuvering in the interest rate, the central bank changes the interest rate, which affects both inflation and exchange rates, and raising the interest rate will raise the value of the currency, and lowering its rate reduces the value of the currency . The current account deficit is the balance of trade between a country and its partners that reflects all payments in exchange for goods, services and benefits. The deficit in the trade balance appears when the country spends more on foreign trade than it earns, and borrows capital from foreign sources to compensate for the deficit, and this indicates that it is asking for currency More foreign than it receives through the sale of exports.

 Public debt:

 Whereas, countries that suffer from deficits and debts are less attractive to foreign investors, because the debt supports inflation, and if it is high, the debt will be serviced and paid with a few real dollars in the future, and if they are unable to fill the deficit through domestic resources, they must reduce their prices. Trade exchange If the price of a country's exports rises at a rate greater than its imports, the demand for its currency will increase, which improves the rates of trade exchange and raises the currency's value, and if the price of exports rises at a lower rate, the value of the currency will decrease in relation to its trading partners.


 Usually, the currency is high in countries where the inflation rate is constantly low due to the increase in its purchasing power compared to other currencies, and during the last half of the twentieth century countries with low inflation included Japan, Germany and Sweden, while the United States and Canada became their inflation rate low in Of late, those countries with high inflation usually see a depreciation of their currency compared to those of their trading partners.