(1) foreign exchange market equilibrium = When the exchange rate falls (such as RMB appreciation and USD depreciation), the foreign exchange demand will be greater than the foreign exchange supply, resulting in excess demand and prompting the exchange rate to rise. On the other hand, if the exchange rate rises (such as RMB depreciation and US dollar appreciation), foreign exchange supply will exceed foreign exchange demand, resulting in oversupply and prompting the exchange rate to fall.
(2) Relative price level = When domestic price level rises and foreign price level remains unchanged, on the one hand, foreign demand for domestic goods decreases, thus reducing exports and foreign exchange supply. On the other hand, because foreign prices are relatively cheap, domestic demand for foreign goods has increased, leading to an increase in imports and an increase in foreign exchange demand. A decrease in foreign exchange supply and an increase in demand will lead to an excess of foreign exchange demand, which in turn will lead to an increase in the exchange rate and a devaluation of China's currency.
(3) Tariffs and quotas = trade barriers. Tariffs and quotas will affect the quantity of imported goods and indirectly affect foreign exchange demand and exchange rate.
(4) Preference of domestic products compared with foreign products (relative preference) = When other conditions remain unchanged, the increase of foreign preference for domestic products will lead to the increase of exports, which will indirectly lead to the increase of foreign exchange supply, which will lead to the decline of exchange rate, that is, the appreciation of domestic currency.
(5) Productivity = When the country's productivity is higher than that of other countries, it will make the price of goods lower and more attractive, which will increase foreign demand for the goods, increase domestic exports and increase foreign exchange supply, which will lead to the decline of exchange rate and the appreciation of domestic currency.
You can even analyze the relationship between the price of McDonald's Maixiang Fort in various countries and the exchange rate in the global foreign exchange market.