What Makes
Currencies
Move?
An Exploration of the Key Forces
That Cause Currencies to Fluctuate
A popular currency pair might fluctuate in price 18,000 times per day, and by
10%–20% per year.1 This implies not only a constant shift in the
supply/demand equilibrium for that currency pair, but also continuous
changes in the financial-economic relationship between those currencies. In
this chapter, I will introduce a framework for understanding these
fluctuations, both in the short term and the long term.
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