2015•World Scientific Book ChaptersRequires access
Exchange Rate Determination and the Exchange Rate System
Xingyun Peng
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Abstract
When studying the foreign exchange market we have learned about the exchange rate, as well as the foreign exchange risks of the forex market and the methods to manage them. What are the main factors that determine exchange rates? Why would a speech by the Chairman of the US Federal Reserve or the Federal Reserve's adjustment of interest rate level give rise to US dollar exchange rate fluctuations in international financial markets? Before we begin the analysis of this chapter, let us first take a look at the exchange rate fluctuations of the Chinese yuan against the US dollar, and against the Japanese yen over the last 10 years…