Will these five currencies regain their stability

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Will these five currencies regain their stability

Worlds’ major economies naturally suffer from one common setback; currency fluctuation, which often comes as a result of floating exchange rate system. Factors such as supply and demand of competing currencies, economic performance, interest rate differentials, capital flows, and resistant levels among others factors often stand out as the major influence of the exchange of one currency against the other.
Regrettably, many people do not pay as much attention to the exchange rates since most of their transactions are either carried out in their domestic currencies or by mere lack of interest to know about economic trends especially those which touches on foreign currencies.
Consequently, most people hold a notion that having a strong domestic currency is something to be proud of since it makes it cheaper to travel or pay for imported products when in reality strong currency can lead to a slow economy as most industries are rendered uncompetitive with lots of jobs being lost in the process.
Therefore, directly or indirectly currency levels are affected by a number of key economic parameters. Here are examples of how some currencies are being affected now or will be affected in future due to various factors of our economy.

Australian Dollar
Until recently Shangai Composite had been outstanding in the currency and financial market in Europe however analysts say its index is bound to receive a sharp decline. Moreover, falling stock prices have also contributed to similar declines in the Australian Dollar which was pushed below $0.7600 mark in the middle of the year.

The vulnerability of Australian Dollar in the Chinese financial markets has been partly contributed by Australia’s strong links to the Chinese economy. There is even a likelihood of Australian dollar falling further due to the pressure of his largest trading partner which may compel Reserve Bank of Australia to ease monetary policy and cut interest rates in order to stimulate domestic growth. Additionally, since Australia accounts for a third of the world’s iron ore production its relations with China which are the highest consumer of iron has always
been outstanding.

Japanese Yen
Another currency that is likely to be affected by Chinas’ Stock market is the Japanese Yen. Analysts say that Japanese Yen thrived and hit its monthly highs amid volatility sparked by Chinas Equity Market, the Greek debt crisis and uncertainty surrounding Federal policies. Meanwhile, the impact of this new height on other foreign financial markets especially in Asia and Europe, is yet to be felt.

When Britain voted to leave the European Union, unprecedented grapple to buy up foreign currencies over fears that pound would fall was witnessed. The dust might have settled but the effect of such move is still being felt though subtly.
This is the currency which is most affected by Brexit since UK stock market is dominated by large international companies whose performance is not linked to domestic UK issues. A lot is still expected to change.

Canadian Dollar
It is projected that Canada’s energy sector will withdraw approximately 22% of its oil export despite the country being the sixth largest oil producer in the world and a country whose quarter of its export is oil. Shall this move be effected then Canadian dollar will even shrink deeper from its current slump of 15 percent against US dollar for the one year period. This unexpected turn of events will affect not only oil trade in the country but also other sectors of the Canadian economy.

Sterling Pound
Sterling pound is also one of the currencies affected by the Brexit and until now it has fallen by 12.5% against the US dollar and 11.4% against the Australian Dollar. However, economists’ expectations are that interest rates will stay on hold until the middle of mid next year.

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