The currency market is influenced by several key factors that determine the value of currencies. Among the most prominent of these factors are interest rates and inflation rates, as high interest rates attract foreign investment, thereby enhancing the value of the currency, while high inflation leads to a decrease in purchasing power and consequently a decrease in the value of the currency. Political and economic stability of the country also plays a crucial role; stability attracts investors and strengthens the currency. Additionally, other factors such as the strength of the economy, GDP, and the trade balance affect exchange rates.
