What factors make foreign currencies go up or down?

As an economics student I've learned all about foreign currencies, and they work on a supply and demand basis as does any good. The value of a curreny will rise, in the main part, when demand for it rises. A lot of this is to do with interest rates. There are 3 main reasons to demand a currency: 1) to import a good from that country (ie. if i want to import USA goods i need to pay in dollars, therefore i demand dollards). 2) speculative investment (to do with interest rates, will explain more shortly). 3) travel (if i go to the usa for example, i will need to take dollars with me as opposed to sterling). Using basic economic analysis, when the demand for a good rises, it's price will increase. Reasons 1 and 3 are fairly straightforward for causing increases in the demand for a good (in this case a certain currency); however, reason 2 may not be so simple. Speculative investment is investment dependent upon interest rates. Investors will move around "hot money" between assorted bank accounts in different countries to increase their returns (they will put their money in the accounts with the highest interest rates possible). Therefore, a rise in the interest rate in a give country (again, using the usa as an example) will cause a rise in the exchange rate. For example, if the uk interest rate is, say, 1 percent, and the usa interest rate is also 1 percent. On the decision day for interest rates if the uk remains the same and the usa rises to 2 percent, investors will gain twice as much interest by holding their money in usa bank accounts, therefore moving their money to usa banks (demanding dollars in doing so), and increaasing the strenght of the dollar. This works similarly if the exchange rate were to have fallen, investors would move their money from usa banks to uk banks, this leading to an increasing supply of dollars, and a fall in the value of the dollar.

The currency has become a trading commodity these days and the value of any currency fluctuates for the very reasons for the fluctuation in the prices of any commodity. To be specific, if the demand of any currency increases in the international forex market, the value of that currency goes up and vice versa.

Wow during the time of ERAP , the whole country was in shambles. It was at that time when Estrada was ousted from office. The was also the Velarde case filed against him. It actually varies. It is not just the country's economy that is the determinant. If the dollar is going down, it mean, pesos conversion is low, this will be good for importers. For exporters and for overseas filipino workers, it is not good.

It is from the economy of our country, the time of Ex President Estrada our economy was getting down, not because of what he is doing, it is because of the "BIG" issue of suing Mr. Estrada by the last president Gloria Macapagal Arroyo. When the country is on a big legacy, the economy is also going down because of the critics that happening, so we cannot blame our economy why it is getting down. The Filipino men also suffers because of the price hike.

It's the law of supply and demand and the dollar reserves that we have. Economics play a vital role in the fluctuation of the dollars. I remember my economics professor giving me a very simple example. If you have a lot of gold bars then you're currency is more likely to be stable. This is the main factor, but politics and other things can also get in the way.

The exchange rate is governed by two factors, according to wikipedia! =P Firstly, it is like anything that is bought and sold... I'll make an analogy, I have ten apples and thirty people want an apple. The local market is nearly sold out because too many people want apples, so I will sell it for much money (let's say 3$ each!) because I will get people to out-bid each other. But now 25 of those people have to go back to work and no longer want apples, now I have ten apples, and only 5 people want apples! I can barely ask for $3 each... they will just say no, maybe go back to the market to get lucky as there is now less demand. Now I have to sell my apples for much less! Like $0.10. =( Damn, I don't like that analogy...! But basicly, when people want something, demand, they will go somewhere to get it. If the amount available, supply, is enough - with the apples after lunch break is over for example - the price will be medium. If demand rises sharply - lunch break - price goes up! If the market suddenly got a lorry in with a thousand apples then the price would go down again, supply changing. So the same goes for currency. Say the German economy is going great! And many people purchase Audi cars and Arnold Schwarzenegger DVDs from abroad, many people will want to buy the Euro with their currency, so the demand for Euros goes up - the price goes up! So the exchange rate goes up... say you have dollars, the Euro will now be more expensive, you will get LESS Euros for your Dollars. But the German bank doesn't want a large value for their Euro, so they release more money, by printing for example, so the supply increases (more apples available!) and the price goes down again! Your dollars will now get MORE Euros than before. This is affect number one - the trade and domestic product (output/things the country sells) to other countries. Another thing is the Interest Rates, and the countries stability (stability is in a way equivalent to high interest rates, as you will see). If interest rates go up - more people (very rich people and large corporations mostly) will want to have money in this country's bank accounts to take advantage of the high interest rates (the same thing for stability, as good stability means that these people, aka the investors, can have safe money in these countries). So the demand for the currency goes up again! And when demand goes up - price goes up! The currency is now more expensive, just as you get less apples for your Dollar when apples are expensive, you get less Euros for your Dollar when the Euro is expensive. I hope that helps. It's a quick break down. There are other things too, but mostly currency is like any other object bought and sold. Just that it is very magic in the way that banks can print it almost instantly and change interest rates to control it... you can't do that so easily with apples! Mainly because they take time to grow and will rot too. Money on the other hand, especially when in such large quantities, is on computer screens. But in essence, you could trade money as if it were apples! =D I'm hungry now... and to answer why the Dollar went up during Esrada's reign... well, I don't know enough history on that. But likey is that your economy did badly and therefor nobody wanted your currency. Your currency is now not as valueable, so you have to trade more of it to get the same dollar as before. If many Off-shore Filipino Workers (I'm assuming that's what OFWs is!) left America.. well, the american economy would be weakened - they would have a lower supply of workers: lower supply = more expensive. If a company has to pay more for workers, their products goes up in price. Price goes up, so less people want to buy from america..... less people demand american Dollar = dollar goes down in value. So you can get more Dollars! Hope that helps.... marks out of 100? =D

I think, its on the economy of the country. As far as i know, when Gloria's reign, she said that our economy if increasing, and the value of dollar to peso is decreasing. Another factor that affects how a given currency's value goes up or down, is the amount of a given currency in circulation and relative inflation. For instance, if a country begins to printing money, the value of a currency is diluted due to inflation, so its value will fail relative to the other world currencies. If a large of the money supply were somehow burned up. It would have the reverse effect. Hope it helped. Happy my lotting.