there are many and complicated factors that affect the exchange rate. To sum up, it mainly includes the following two categories:

1. Long-term influencing factors: balance of payments, inflation, interest rate level, exchange rate policy, etc. Among them, a country's balance of payments plays a long-term decisive role in exchange rate changes, which will directly affect the supply and demand relationship in the foreign exchange market;

2. Short-term influencing factors: speculative activities and major economic and political events or the release of economic data. Before, during and after the occurrence of major economic and political events or economic data, the market will expect the trend of the events, thus affecting the exchange rate. Exchange rate changes are the result of multiple factors * * *, and the above factors will work at the same time, and individual factors may also play a decisive role; Multiple factors may produce synergistic effects or cancel each other out.

For example, on January 15th, 215, the Swiss National Bank suddenly announced that it would cancel the peg to the euro and maintain the lower limit of 1.2, which has been maintained since September 211. This change in exchange rate policy led to a sharp rise of the Swiss franc against other currencies, with a maximum increase of 4% to .85 Swiss francs per euro. Another example is the economic events such as the Fed's interest rate hike, which has attracted worldwide attention. When employment in the United States continues to improve and inflation rises, the Federal Reserve will raise the target range of the federal funds rate to prevent the economy from overheating. When the Federal Reserve's Open Market Committee announces the decision to raise interest rates, the market will react instantly, and there will be exchange rate changes such as the strengthening of the US dollar index and the weakening of non-US currencies against the US dollar. For another example, the publication of major economic data will also have an impact on the exchange rate: a country's PMI data is usually regarded as a leading indicator of a country's economic trend, and when similar economic data are published, the foreign exchange market will also change accordingly. When the published PMI value is worse than expected, the country's currency will weaken accordingly.

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