Equity is the value of an asset less the value of all liabilities on that asset. Our triffin dilemma investopedia forex of expert financial advisors field questions from our community. Sophisticated content for financial advisors around investment destabilizing speculation investopedia forex, industry trends, and advisor education.
A celebration of the 100 most influential advisors and their contributions to critical conversations on finance. The latest markets news, real time quotes, financials and more. Floating Exchange Rate’ A floating exchange rate is a regime where the currency price is set by the forex market based on supply and demand compared with other currencies. Fixed Exchange Rates Currency prices can be determined in two ways: a floating rate or a fixed rate.
As mentioned above, the floating rate is usually determined by the private market through supply and demand. Therefore, if the demand for the currency is high, the value will increase. This, in turn, will make imported goods cheaper. To maintain its exchange rate, the government will buy and sell its own currency against the currency to which it is pegged on the forex market. But in reality, there are very currencies are rarely wholly fixed or floating because market pressures can influence exchange rates.