Why Do Exchange Rates Fluctuates ?

Simplified Reasons

Factors include:

• Monetary policies of the federal reserve or central bank.
  

• Health of an economy.
  

• Trade policies.
  

• Currency inflation and deflation.

FACTORS CAN BE CATEGORISED INTO 3:
1 Economic factors
2 Political factors
3 Market psychology

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Source and Read
www.answers.com/Q/What_factors_contribute_to_the_fluctuation_of_exchange_rates#ixzz1F4Kxnr3v