Forces behind Exchange Rates of Spread Betting Companies
As a speculator or investor (sound better compare to earlier), it is a must to know what are the forces behind exchange rate. Spread betting companies provide the spreads for your base on the exchange rate of the foreign exchange market. Banks and financial institutions facilitate the transactions of currency exchange. There are several forces behind the changes in exchange rates.
First, trade flow between countries reflects the demand of goods and services for a country. This also indicates the demand for the country currency to conduct trade. Secondly, government policy such as tax, tariff and labour law can influence investment from foreign countries which will reflects on the exchange rates too. Third, unintentional intervention by government fiscal and monetary policy may also affect the exchange rate.
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