Global business investment Coursework Example | Topics and Well Written Essays - 2500 words

Global business investment - Coursework ExampleBecause of this reason, replace sites analyzed, watched and manipulated frugal measures by the government.Exchange rates be also useful when studyd on a smaller home plate they influence the real return of the portfolio of an investor. There are several factors that affect exchange rates. Before we examine these factors, it is important to look at how exchange rate affects the trading relationships between countries. A lower silver is considered to consume exports of a country cheaper and imports expensive in the foreign markets. A spiriteder currency is considered to make exports of a country expensive and imports cheaper in the foreign markets. Hence, a lower rate of exchange ordain increase the balance of trade of a country while a higher rate of exchange is expected to lower it.There are several factors that have influence on exchange rates, and they are associated with the trading relationship between countries on a global level known as internationalization or globalization (Hill 2012). It is significant to understand that exchange rates are expressed as a comparison of two currencies from two countries. It is also significant to understand that these factors cannot be discussed in a particularized order similar to numerous aspects of economics, the significance of these factors is usually subjected to discussion. The following are discussed determinants that influence exchange rate between countries.Exchange rates, pertain rates, and inflation are all highly correlated. Central banks in manipulating pursuit rates can exert influence on both exchange rates and inflation, and altering interest rates influence currency and inflation values. Interest rates that are high offer lenders high return in an economy relative to other countries. For this reason, interest rates that are high get in a huge amount of foreign capital and result in a rise in the exchange rate. For instance, if the United Kingdo m rates rise in relation to elsewhere, it becomes