Saturday, February 27, 2010

Lesson 8 : Political Standings

All exchange rates are susceptible to political instability and anticipations about the new ruling party. Political upheaval and instability can have a negative impact on a nation's economy. For example, destabilization of coalition governments in Pakistan and Thailand can negatively affect the value of their currencies. Similarly, in a country experiencing financial difficulties, the rise of a political faction that is perceived to be fiscally responsible can have the opposite effect. Also, events in one country in a region may spur positive/negative interest in a neighboring country and, in the method, affect its funds.

Internal, regional, and international political conditions and events can have a profound effect on funds markets.

No comments:

Post a Comment