<P> In a floating exchange rate system , a currency 's value goes up ( or down ) if the demand for it goes up more ( or less ) than the supply does . In the short run this can happen unpredictably for a variety of reasons , having to do with trade flows , speculation , or other factors in the international capital market . For example , a surge in purchases of foreign goods by home country residents will cause a surge in demand for foreign currency with which to pay for those goods , causing a depreciation of the home currency . </P>
<P> In a floating exchange rate system , a currency 's value goes up ( or down ) if the demand for it goes up more ( or less ) than the supply does . In the short run this can happen unpredictably for a variety of reasons , having to do with trade flows , speculation , or other factors in the international capital market . For example , a surge in purchases of foreign goods by home country residents will cause a surge in demand for foreign currency with which to pay for those goods , causing a depreciation of the home currency . </P>
how does a currency lose or gain value
how does a currency lose or gain value
if the demand for it goes up more ( or less ) than the supply does . In the short run this can happen
if the demand for it goes up more ( or less ) than the supply does . In the short run this can happen