exchange rates

reasons for low UK exchange rates?

• low interest rates in the UK - makes the UK less attractive as a destination of hot money

• Fall in demand for the sterling

• Fall in demand for exports

• A persistent trade deficit

• fall in demand for FDI into the UK

• Fall in hot money coming into the UK e.g. investments

• Low investor confidence

reasons for high UK exchange rate?

• High interest rate

• High demand for the sterling

• High demand for exports

• Persistent trade surplus

• Increase in demand for FDI

• Increase in hot money coming into the UK

what are factors which affect the demand for currency?

• Toursits

• Buyers buying UK exports abroad

• investors to invest in the uk e.g. hot Money

• FDI

what are factors which affect the supply for currency?

• UK tourists changing their pounds into another currency to go on holiday

• UK consumers buying imports

• UK investors to invest abroad

• UK FDI