Excchange rates to low

eager


Joined: 23/02/2007
Posts: 1272

Message Posted:
20/05/2009 14:12

Exchange rates have hardly moved in the last few weeks, unlike in the previous weeks when there was more movement, anyone know why ? Does anyone think that the rate will rise soon ?

TimothyCadman


Joined: 13/12/2007
Posts: 1040

Message Posted:
20/05/2009 14:55

Exchange rates are steady because every other rate is steady. No one is investing. No one is speculating, so prices don't change. Until Interest Rates in the US, UK and Euro Zone start to rise don't expect any rates around the 2.7tl to 3tl to the Pound.

eager


Joined: 23/02/2007
Posts: 1272

Message Posted:
20/05/2009 15:05

msg 2.... Is that likely, heard on tv that rates will rise next year.

TimothyCadman


Joined: 13/12/2007
Posts: 1040

Message Posted:
20/05/2009 15:12

eager,



If the Banks start lending again to business so they can expand, thus getting more people into work who then buy goods; but buy goods that are made in Foreign Countries, thus forcing Inflation to rise, then Interest Rates will rise to try and halt the rise of inflation, the theory being that if people can get lots of money for their investment they won't spend it, then the exchange rates will rise as other people with money will save money in those denominations.



This is an over simplified way that Economics works. There are many more factors I am aware of and others will be too. But for simplicity of understanding, lets keep it simple!