Although the fluctuation of exchange rate is ever-changing, it is determined by the relationship between supply and demand, just like other commodities. In the international foreign exchange market, when there are more buyers than sellers of a certain currency, the buyers scramble to buy it, and the buyer's power is greater than the seller's, so the seller's exotic goods can live, and the price will inevitably rise. On the other hand, when sellers see that the market is not good and compete to sell a certain currency, the seller's power has the upper hand in the market and the exchange rate will inevitably fall. But there are many factors that affect the balance of supply and demand, but in a nutshell, there are mainly the following points:

1. The economic growth rate of a country. This is the most basic factor affecting exchange rate fluctuations. According to the macroeconomic theory of Keynesian school, the growth of gross national product will lead to the growth of national income and expenditure. The increase of income will lead to the expansion of the demand for imported goods, which in turn will expand the demand for foreign exchange and promote the depreciation of the local currency. The increase of expenditure means the increase of social investment and consumption, which is conducive to promoting the development of production, improving the international competitiveness of products, stimulating exports and increasing foreign exchange supply. So in the long run, economic growth will cause the appreciation of the local currency. From this perspective, the impact of economic growth on foreign exchange is complex, but if the role of currency preservation is considered, exchange psychology has another explanation. That is, the value of money depends on the subjective evaluation of money by both the foreign exchange supply and demand sides, and the contrast of this subjective evaluation is the exchange rate. When a country's economy is developing well, its subjective evaluation is relatively high and its currency is firm.

2. Balance of payments, which is the most direct factor affecting the exchange rate. As early as 65438+1960s, Gehlsen, an Englishman, elaborated on the influence of balance of payments on exchange rate, and then mentioned portfolio theory. The so-called balance of payments is simply the import and export of goods and services and the input and output of capital. In the balance of payments, if exports exceed imports and capital flows in, it means that the demand for the country's currency in the international market increases, and the local currency will rise. On the other hand, if imports exceed exports and capital flows out, the demand for the country's currency in the international market will decrease and the local currency will depreciate.

3. The difference between the price level and the inflation level. Under the paper money system, the exchange rate is fundamentally determined by the actual value represented by money. According to purchasing power parity, currency purchasing power parity is not just the currency exchange rate. If a country's price level is high and inflation rate is high, it means that the purchasing power of local currency declines, which leads to the depreciation of local currency. Instead, it tends to appreciate.

4. Differences in interest rate levels. All the theories of monetary school discuss the role of interest rate in exchange rate fluctuation. However, the most clear explanation is the interest rate evaluation theory, which emerged after the 1970s. This theory well explains the exchange rate changes in the short and medium term. The influence of interest rate on exchange rate is mainly realized through the influence on arbitrage capital flow. Under moderate inflation, higher interest rates

It will attract foreign capital inflows, curb domestic demand, reduce imports and make the local currency appreciate. However, under severe inflation, interest rates are negatively correlated with exchange rates.

5. People's psychological expectations. This factor is particularly prominent in the current international financial market. According to exchange psychology, foreign exchange rate is the concentrated expression of subjective psychological evaluation of money by both foreign exchange supply and demand sides. If the evaluation is high and confidence is strong, the currency will appreciate. This theory plays a vital role in explaining countless short-term or extremely short-term exchange rate fluctuations. In addition, the factors that affect exchange rate fluctuations include the government's currency, exchange rate policy, the impact of emergencies, the impact of international speculation, the release of economic data and even the impact of opening and closing, and these factors will also strengthen or offset each other.

The main economic data affecting the foreign exchange market: the monthly (or quarterly) economic statistics released by the United States have the greatest influence, followed by euro zone countries, Japan, Britain, and finally Australia, Canada, Switzerland, etc. The biggest reason why the dollar plays a role is that it is the most important currency in the international foreign exchange market, and also because it accounts for a balance in international trade.

More than 50% of the calculation methods. From the content of economic statistics, the order of effect is interest rate adjustment, employment (non-agricultural employment population in the United States), gross national product, industrial production, foreign trade, inflation rate, production price (price) index, consumer price index, wholesale price index, retail price index, consumer confidence index, housing (construction) operating rate, personal income, automobile sales, average wage and commerce.