Changes in the Exchange Rate

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If there is no change in supply of U.S. dollars, but there is an increase in demand, there will be an increase in the rise of exchange rate. Similarly, if there is no change in supply of U.S. dollars, but there is a decrease in demand for it, there will be a drop in exchange rate.

Again, if there is no change in demand related to U.S. dollars, but there is a decrease in supply, there will be a hike in exchange rate. In the same way, if there is no change in demand related to U.S. dollars, but there is an increase in supply of it, there will be a drop in exchange rate.

It can be stated that such forecast is similar if compared with any other type of market.

 

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