1. Exchange rate refers to the exchange rate between two currencies, and can also be regarded as the value of one country's currency against another's currency. Specifically, it refers to the ratio or parity between one country's currency and another country's currency, or the price of another country's currency expressed in one country's currency. Exchange rate changes have a direct regulatory effect on a country's import and export trade. Under certain conditions, by devaluing the local currency, that is, letting the exchange rate rise, it will promote exports and restrict imports; On the other hand, the appreciation of the domestic currency, that is, the decline of the exchange rate, plays a role in restricting exports and increasing imports.
2. "Exchange rate", also known as "foreign exchange market" or "exchange rate", is the exchange rate at which one country's currency is converted into another country's currency, and the price of another currency is expressed in one currency. Because of the different names and values of currencies in the world, one country's currency should set an exchange rate for other countries' currencies, that is, the exchange rate. In the short term, a country's exchange rate is determined by the demand and supply of foreign currency. Foreigners buying their own goods, investing in their own countries and speculating on their own currencies will all affect the demand for their own currencies. Domestic residents want to buy foreign products, invest in foreign countries and speculate in foreign exchange, which affects their money supply. In the long run, the main factors affecting the exchange rate are: relative price level, tariffs and quotas, preference for domestic goods relative to foreign goods and productivity.
3. Exchange rate changes and balance of payments. If a country has a surplus in its balance of payments, its currency exchange rate will rise; If it is a deficit, the exchange rate of the country's currency will fall. Inflation. If the inflation rate is high, the country's currency exchange rate is low. Interest rate. If a country's interest rate rises, the exchange rate will be high. Economic growth rate. If a country's economic growth rate is high, its currency exchange rate is high. Fiscal deficit. If a country has a huge budget deficit, its currency exchange rate will fall. Foreign exchange reserves. If a country's foreign exchange reserves are high, its currency exchange rate will rise. The psychological expectation of investors. The psychological expectation of investors is particularly prominent in the current international financial market.