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Trade imbalances
How Do Trade Imbalances Influence Currency Exchange Rates?
November 21, 2023
What are the effects of trade imbalances on the foreign exchange market?
Trade imbalances, where a country's imports exceed its exports or vice versa, can impact currency exchange rates in the foreign exchange market. Persistent trade deficits or surpluses can lead to currency depreciation or appreciation, respectively. Market reactions to these imbalances can affect exchange rates, trade flows, and global economic stability.
Tags : Trade Imbalances , Currency Exchange Rates , Foreign Exchange Market