• Devaluation. Some countries devalue their currencies to increase the quantum of their exports. Value of the domestic currency decreases as a result of it.
• Mobility of capital. When a country gets loan from another country, the creditor country will need currency of the debtor country. Due to increase in the demand for the debtor country currency, its value will increase and vice versa.
• Political situations. When political affairs of a country are not stable and occurrence of revolutions are common feature, the people of that country will sell the currency instead of keeping it with them. It will cause a decrease in the value of the currency of that country.
• Effects of stock exchange. If any country begins to purchase shares and securities of a country, the value of that country’s currency will increase and it will result in value of that country’s currency.
• Speculative effects. When there is a speculation of an increase in the value of any currency, the people start will start to purchase greater amount of that currency.
skilled writter answered the question on May 1, 2018 at 16:24
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