Question

Foreign exchange market for the situation when the value of domestic currency begins to fall in comparison to foreign currency

Answer 1

Currency Influences

In contrast, if a country imports more than it exports, there is relatively less demand for its currency, so prices should decline. In the case of currency, it depreciates or loses value.The supply of a currency is determined by the domestic demand for imports from abroad.  The more it imports the greater the supply of pounds onto the foreign exchange market. A large proportion of short-term trade in currencies is by dealers who work for financial institutions.

Answer 2

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The Currency appreciation is an increase in the value of one currency in relation to another currency. Currencies appreciate against each other for a variety of reasons, including government policy, interest rates, trade balances, and business cycles.