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Explain the factors that determine foreign exchange rates and their link to financial markets. In terms...

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Finance

  1. Explain the factors that determine foreign exchange rates andtheir link to financial markets. In terms of balancing mechanisms,how does covered interest arbitrage ensure market equilibrium?

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Foreign exchange is a rate at which a countrys currency is converted into another countrys currency Foreign exchange rates provide an insight into a countrys economic stability and are therefore vital to be constantly monitored and analyzed Below mentioned are the factors that determine a countrys foreign exchange rates Inflation rates Any change in market inflation has an impact on foreign    See Answer
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Explain the factors that determine foreign exchange rates andtheir link to financial markets. In terms of balancing mechanisms,how does covered interest arbitrage ensure market equilibrium?

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