Currency Fluctuations: The Role of Shifting Demand & Supply

Currency Swings: A Matter of Supply & Demand, How Shifting Demand and Supply Move Currencies

What you’ll learn

• What is the effect of rising demand of foreign exchange on exchange rate?
• If the demand of foreign exchange decreases, what is the impact on exchange rate?
• How increased foreign exchange supply effects exchange rate?
• What is the relationship between foreign exchange supply increase and forex rate movement?

Requirements

• Basic understanding of economic principles such as supply and demand, inflation and interest rates

Description

1. What is meant by exchange rate?
2. What are the reasons for increase in foreign exchange demand?
3. What is the impact of increase in foreign exchange demand on exchange rate?
4. When foreign exchange demand increases, there is appreciation or depreciation of foreign currency? Comment.
5. When demand of foreign exchange increases, what is the impact on domestic currency?
6. When forex demand increases, the new demand curve shifts to the right or left of the previous demand curve?
7. Why demand of foreign exchange decreases?
8. What is the impact of decrease in foreign exchange demand on exchange rate?
9. When demand of foreign exchange decreases, the demand curve also shifts – whether to the right or left of existing demand curve?
10. When foreign exchange demand decreases, there is appreciation or depreciation of foreign currency. Discuss.
11. What may be the possible reasons behind the increase in supply of foreign exchange?
12. When foreign exchange supply increases, what is the effect on exchange rate?
13. When supply for foreign exchange increases, the supply curve shifts to right or left. Comment.
14. What are the possible reasons for the supply of foreign exchange to decrease?
15. When foreign exchange supply decreases, what is the affect on exchange rate?
16. What is the effect on supply curve when supply of foreign exchange decreases?

Who this course is for:

• Students and any individual who enjoys learning about various concepts of economics