Foreign Exchange rate (ForEx rate) is one of the most important means through which a country’s relative level of economic health is determined. A country’s foreign exchange rate provides a window to its economic stability, which is why it is constantly watched and analyzed. If you are thinking of sending or receiving money from overseas, you need to keep a keen eye on the currency exchange rates.
The exchange rate is defined as “the rate at which one country’s currency may be converted into another.” It may fluctuate daily with the changing market forces of supply and demand of currencies from one country to another. For these reasons; when sending or receiving money internationally, it is important to understand what determines exchange rates.
These are the main economic data and news that can have an impact on a country’s currency:
- Interest rates
- Fed announcements
- Trade balance
- Unemployment rates
- Consumer and business sentiment
- Government debt
- Political stability