What influences exchange rates?
Exchange rates fluctuate constantly due to a mix of economic, political, and market driven factors. The most common influences include interest rates, where central banks such as the RBA, adjust interest rates to control inflation. Higher interest rrates often strengthen a currency. Inflation can also paly a factor, where lower level support a currency’s value by maintaining purchasing power.
Economic data like GDP growth, unemployment and consumer spending all drive market sentiment that go on to effect exchange rates. Global trade directly effects demand and supply for each currency at a base level and of course Geopolitical stability, politcal events and trade disputes can all effect this global trade.