Discover how trade surpluses and deficits impact a country's currency exchange rate through supply and demand fluctuations.

We offer a unifying empirical model of covered and uncovered currency premia, interest rates and spot and forward exchange rates, both in the cross section and time series of currencies. We find that ...

While short-term movements can seem unpredictable, currency values are ultimately shaped by a set of underlying economic forces that interact continuously. Rather than moving for a single reason, ...

Learn about the USD/CAD currency pair, which defines the exchange rate between U.S. and Canadian dollars, essential for forex trading insights.

Under dominant-currency pricing—where many export prices are set in dollars—the real exchange rate allocates export windfalls between producers and consumers. When the real exchange rate is stable, ...