Short Article and 3 Questions

Short Article and 3 Questions

  • What geopolitical factors have contributed to uncertainty in the foreign exchange market?
  • What is currency devaluation? Why might China devalue its currency?
  • How do fluctuations in currencies impact companies?

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Solution Preview

#1

Among the many factors affecting currency, geopolitics is one of most powerful when it comes to how nations relate financially. When the political aspects in a particular country are uncertain, it means that investors will be uncertain about their activities and hence might lead to financial crises. Some of the factors in the geopolitical segment influencing the markets include a nation’s stability, trade relations and important events like elections which might take up much time and resources hence influencing the currency (Dulaney & Iosebashvili, 2018).

(332 words)

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