Categories Finances

Factors Affecting Foreign Exchange Rates

One of the most-watched economic parameters is forex exchange rates. Exchange rates can be defined as a comparison of a country’s currency value to that of another nation. Forex exchange rates have a direct effect or trade and foreign investments. They are particularly relevant to individuals who money from one currency to another. The volatile nature of exchange rates makes it imperative for anyone in a business that is affected by exchange rates to keep up with key developments in financial markets. Here are some factors that affect foreign exchange rates.

Current Account Deficits

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A current account deficit defines the difference in the account balance of trading countries. For instance, a deficit results when a country imports goods of high value than those it imports. This imbalance in trade often ends hurting the value of a local currency, considering that it needs more foreign capital. Countries should try and improve the value of their exports to address these imbalances.

Government Debt

The total debt owed by the central government also affects the foreign exchange rate. A country with huge amounts of debt is prone to inflation due to the increased volume of foreign investment and capital. This explains why most countries are overly cautious when it comes to international borrowing.

Economic Performance

The economic performance of a country also affects the value of its local country, and consequently, its exchange rates. Economic performance depends on a country’s political stability and policies. Favorable governmental policies go a long way in encouraging both local and foreign investments, thereby affecting the value of local currencies.

Interest Rates

dollar currencyHow much banks charge borrowers also affects foreign exchange rates. Interest rates affect the borrowing and spending abilities of the borrowers. High interest rates improve business costs and also hurt investments. Interest rates, therefore, can be used to assess a country economic performance and the performance of its currency in the forex markets.


Speculation is essentially about projects in a country economic position. Forex traders should be on the lookout for signs that might be indicative of the currency of a country is about to rise or decline. The ripple effect is described as inflation. A high demand of a local among forex traders, for instance, might push its value up. This consequently leads to improved foreign exchange rates.…

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Categories Finances

Facts about bitcoin few are aware of

The year that Bitcoin exploded exponentially and transforming into a household name was 2017. This year saw an incredible price rally that attracted a great deal of attention from the international media. What was once shunned as a fringe internet scam has become a regular in the business news section? It is hard to come across someone who has not come across the name Bitcoin. Surprisingly, there are some facts about Bitcoin that many remain oblivious about.

1. Identity of the inventor is unknown

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The alias name of the inventor of the cryptocurrency is Satoshi Nakamoto. What is surprising is how he vanished completely after inventing Bitcoin. According to Bitcoin economy insiders, it is estimated that Satoshi Nakamoto is worth over $13 billion and has been nominated for a Nobel Prize under the category of Economic Sciences. The last post made under his alias name was back in 2011.

2. Bitcoin is not controlled by a person or entity

We are so used to the conventional financial system that the thought of an autonomous self-run currency seems impossible. Surprisingly, this is the case with Bitcoin. No government or central bank can regulate it, meaning that the users are their own bank. It is no surprise that several governments have declared the use of Bitcoins to be illegal. In countries like Bangladesh, using Bitcoins can land you in jail. Despite the threat for governmental bodies and agencies, many users still prefer to use Bitcoins. Their peer-to-peer nature means their use cannot be stopped or checked.

3. Limited Supply

Currently, there are over 21 million bitcoins circulating in the market. This was how it was coded. It is approximated that the 21million coin limit will be reached in 2140. As of now, there are close to 17 million coins in circulation. The limit in supply remains one of the reasons why the value of Bitcoin has shot through the roof.

4. Over 20,000 Bitcoin millionaires

According to the Bitcoin rich standings, over 20,000 people are past the millionaire mark. As a matter of fact, some have even crossed the Billionaire mark. This was witnessed during the recent price surge that got all analysts off-guard.

5. Transparency

There is a popular notion that Bitcoin is highly anonymous. Unfortunately, this is not so. The transactions that take place through Bitcoin are quite transparent. Your Bitcoin is stored in a single address meaning you will keep reusing it. This means that everyone you interact with can trace your online footsteps. As a result, Bitcoin is regarded as the most transparent money system ever invented.

6. Supercomputers are no match for the Bitcoin network

bitcoin networkThe power of 500 supercomputers when combined cannot match the Bitcoin network. As of now, the networks operate at a hash rate of just under 15 million TH/s. This is more than the world’s most powerful supercomputer.

7. Bitcoin energy use exceeds that of some countries

A report by a leading UK energy platform reveals that the power consumption by Bitcoin is over 30TWh annually. This figure is more than 159 individual countries in the Americas, Africa, and Europe.…

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