market currencies

If you examine the exchange rate between the US dollar and emerging‑market currencies, many things matter: inflation differences (higher inflation tends to weaken a currency), interest‑rate disparities (higher rates attract foreign investment and support the local currency), trade balance and demand for exports (export surplus strengthens currency), and overall economic performance and stability — strong economies with stable policies attract capital, boosting their currency. Political stability, debt levels and investor sentiment also play https://trading.biz/posts/what-affects-exchange-rates-between-usd-and-emerging-market-currencies a big role: if a country seems risky or unstable, investors pull out, making its currency weaker. On top of that, global conditions — like demand for commodities, global interest rates (especially US rates), and risk‑appetite of international investors — influence flows of capital and therefore exchange rates, making emerging currencies more volatile when external conditions shift.