(1) balance of payments
A country's balance of payments can reflect its foreign exchange supply and demand.
inflation
According to purchasing power parity, inflation is the most important basic factor affecting exchange rate changes.
(3) Interest rate
In the short term, the impact of interest rate on exchange rate is extremely significant.
economic growth
Other things being equal, economic growth driven by domestic demand growth will lead to an increase in imports. If the economic growth of other countries is slow, the export growth of that country is also slow. This can easily lead to a deficit in the country's trade balance and a fall in the country's currency exchange rate.
(v) Government policies
All government policies will directly or indirectly affect the exchange rate through various channels.
(6) Psychological expectation
People's psychological expectations of various price signals will affect the exchange rate. If people expect the exchange rate of local currency to fall, they may sell their local currency in the foreign exchange market, which will encourage the depreciation pressure of local currency.
(7) foreign exchange speculation
Foreign exchange speculation refers to the foreign exchange trading behavior based on exchange rate expectation, aiming at earning the difference of exchange rate changes and taking foreign exchange risks.