December 2015
Intermediate to advanced
313 pages
16h 2m
English
Content preview from International Business, 2nd Edition by Pearson
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International Financial System 131
The foreign exchange market is the place where prices of currencies are fixed and decided. Just as the
price of a commodity is fixed in the market for goods and services, the price of the exchange rate is also
determined in the market for foreign exchange. The demand for a foreign currency is linked to payments
for imports or for making investments abroad, by residents of the home country. The supply of foreign
currency comes from export earnings and from investments into the home country by residents of other
countries. However, sometimes governments or their central banks intervene in the foreign exchange ...
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