Recent events in our country have forced manycitizens to think about what to do with their savings and how not to be in the red with a possible devaluation of the national currency. The ruble is weakening. To deny it is completely useless. But what determines the currency rate? After all, there are so many decisive factors. And what determines the dollar rate to the ruble? What is the relationship between these currencies?
It is difficult to understand what determines the exchange rate, notknowing what exactly affects the course of their national currency. The ruble came to us from ancient times. But over time, the causes of its strengthening and weakening did not change at all. First of all, the trade balance affects the exchange rate. That is, the ratio of the number of produced imports in relation to exports. This means that the more this ratio will tend to zero, the less prerequisites there will be for concern. After all, if, for example, exports significantly exceed imports, then this can lead to a lack of competition and to a decrease in the level of exports. And if imports take a leading position, this can lead to a sharp decrease in the amount of foreign currency in the country, which will lead to a decrease in the value of the domestic currency. What, in principle, can be observed today in Russia. In general, not only this leads to an imbalance of the ruble. There are many factors that can affect its growth or decline: geopolitics, inflation, GDP, unemployment, macroeconomic indicators of the country and other reasons.
После того как Вторая мировая война была finished, the United States secured the title of superpower. The US dollar poured into Europe, and this was the reason for its becoming a reserve status currency. Today, the dollar has grown significantly. But it also has weak points: there are some factors that can affect its value. First of all, this is, of course, the demand for the dollar in other countries. But it is also very important how this monetary unit develops within its own country. After all, there are some factors that the US uses specifically to increase the value of the national currency. First of all, they include GDP growth, economic development, the balance of payments and the number of unemployed. Often, the growth of the dollar can affect the banking system within the country. Interest rates and dividends can be monitored by applying special programs and activities. It is difficult to say what determines the exchange rate to a greater extent. Each factor plays a separate role.
Russia is a very powerful state, but whydollar more expensive? And what determines the dollar rate to the ruble? The ruble was not always cheaper than a dollar. But lately, this trend has simply taken root in Russia. For several decades, the dollar is worth much more than a ruble. Explain this pattern is quite simple. Before the abolition of the gold standard, the value of each currency was confirmed by the gold reserves of its state. Money is different only in weight, shape, design and quality of metal. But after the abolition of the standard, a variety of factors began to put pressure on each monetary unit. They later began to determine its value in relation to other currencies. Gold is not enough for everyone, and this is a fact. Therefore, most countries try not to issue more money than goods produced in the country. This is done in order to avoid an economic crisis. From this the conclusion follows: the currency of the country producing the most goods, and will occupy a leading position throughout the world. Today this country is America.
What determines the exchange rate?In order to answer this question more fully, it is necessary to have knowledge in the field of financing. But if we speak in a simpler language, then we get this scheme. All states use interest rates to conduct their own monetary policy and control the exchange rate. As you know, the size of this interest rate is always influenced by several factors: the level of inflation, government policy, the demand for a certain currency. Among the most influential factors are the following: relative interest rates, purchasing power parity, economic conditions, the demand for capital and its supply. Together, all these reasons will form one or another value of the purchase and sale of each currency. From What is the level of the exchange rate? Perhaps, it depends on how much all these factors will develop.
Why are currency rates moving?As mentioned earlier, each of them has a certain impact trade relations. Also, the exchange rate depends on exports and imports. With the growth of national income increases and the demand for imported goods. This, of course, leads the national currency to low positions. This factor is called “purchasing power parity”. Another important factor that influences the direction of capital flow is speculation with currency. In most cases, this is due to the desire of investors to have more lucrative deals, adding up the price of foreign currency. Consequently, such actions lead to the movement of capital from one country to another, which negatively affects the financial market. This phenomenon is called “capital flight”. The consequences of this factor can be quite negative, for example, lead to a sharp jump in rates, and possibly to the present crisis. Why is the currency rate moving? The long-term trend of movement of courses is significantly affected by various types of funds. After all, the main activity of these organizations is investment. If we consider the amounts held by the funds, it becomes clear how these investments can affect the exchange rate. For example, make it move in one direction for a long time. And of course, it is impossible not to note the influence of the state on the exchange rate with the help of banks. As well as the activities of importers and exporters.
Recently, many began to resort toearnings with the help of the Forex market. And at the same time, the question of what the Forex exchange rates depend on is becoming increasingly common. The main drivers of currencies in this market are two factors: export and import, as well as capital activity. Say what you like, but everything related to the currency and its value depends solely on trade relations between countries. After all, the higher the value of goods produced in their own country, the currency will be more expensive. Well, about the activity of capital has already been said above. It is very important to note that the Forex market is intended for people who simply want to exchange one currency for another to use it. But today, most of the participants in this market are speculators who profit from the movement of stock prices. At the same time, they can use even small fluctuations in exchange rates for their speculations.
What determines the currency rate?As mentioned earlier, many factors play a role in shaping the value of each currency. But the most noticeable effect on rate fluctuations is the cost of oil. This is especially reflected in the dollar equivalent. Recently, the United States has significantly increased the amount of extracted energy. In this regard, the OPEC countries have lowered the cost of oil from 100-120 dollars (to 50-60 dollars per barrel). And this primarily affected the state of the economy of many countries. Including Russia, which today is struggling with the problem of the fall of the national currency. Earlier, when oil consumption in the United States was at a high level, and the “shale revolution” did not yet embrace the world, the dollar reacted negatively to an increase in oil prices. Today the situation has changed dramatically.
The year 2014 was not an easy one for the financial market.And this affected not only Russia, but also a number of other countries. For example, by the end of the year, the dollar strengthened against the euro by 11%. The yen is in an even more difficult situation, the dollar strengthening level was 12%. Of course, the result of Russia is difficult to equate to the losses of these countries, because the ruble exchange rate fell by almost 45% over the year! And the results of virtual currency (Bitcoin) and completely fell to the bottom. Compared to November 2013, bitcoins have fallen by 72% against dollars. The minimum losses for this year suffered such currencies as the British pound, the Indian rupee, the Chinese yuan. Such behavior of currencies, first of all, is connected with the fall in prices for "black gold".
Market "Forex" can often give beginnerscustomers useful information on how to predict currency rates. First of all, according to experts, it is necessary to monitor all the events in the world of politics and economics. It is also mandatory to be attentive to the forecasts of leading analysts for the near future. Of course, it is impossible in any case to fully rely on someone else's opinion, but it is still necessary to listen. In order to try to predict the exchange rate for the near future, it is necessary to take into account interest rate parity, purchasing power parity and other nuances that are associated with the movement of exchange rates. Of course, not everyone is able to quickly learn all the subtleties of the financial market, but with a strong desire this is still possible!
