Global business investment Coursework Example | Topics and Well Written Essays - 2500 words

Global business investment - Coursework ExampleBecause of this reason, transfer rates analyzed, watched and manipulated economic measures by the government.Exchange rates ar also useful when examined on a smaller scale they influence the real return of the portfolio of an investor. There are several factors that affect exchange rates. Before we examine these factors, it is important to look at how exchange rate affects the trading relationships between countries. A lower silver is considered to make exports of a country cheaper and imports expensive in the impertinent markets. A higher currency is considered to make exports of a country expensive and imports cheaper in the foreign markets. Hence, a lower rate of exchange will increase the balance of trade of a country while a higher rate of exchange is expected to lower it.There are several factors that have influence on exchange rates, and they are associated with the trading relationship between countries on a global level kno wn as internationalization or globalization (Hill 2012). It is significant to understand that exchange rates are expressed as a comparison of two currencies from two countries. It is also significant to understand that these factors cannot be discussed in a specific order similar to numerous aspects of economics, the significance of these factors is commonly subjected to discussion. The following are discussed determinants that influence exchange rate between countries.Exchange rates, kindle rates, and inflation are all highly correlated. Central banks in manipulating interest rates can exert influence on both exchange rates and inflation, and altering interest rates influence currency and inflation values. take rates that are high offer lenders high return in an economy relative to other countries. For this reason, interest rates that are high allure a huge amount of foreign capital and result in a climb on in the exchange rate. For instance, if the United Kingdom rates rise i n relation to elsewhere, it becomes