What Causes Drastic Currency Changes?
according to most of the academic theories out there, drastic currency move shouldn't happen after all. currency rates are supposed to be based on the relative levels of interest rates, inflation and so on, and those numbers do not change by nearly the same magnitude that currency rates can and do. but drastic changes do happen and they ? become very hard to predict. so, what is behind this behavior? investors should always remember that currency speculators often make heavy use of leverage, borrow of money that lets them control large amounts of currency. many investors will use leverage at the rate of 25:1 or 50:1 or more, and that heavy ? buying and selling power ? for currency move. so, even a relatively small move in a currency, a move that may be reasonable given an interest rate announcement or trade balance report can quickly get blown out of proportion. sometimes the events themselves call for bigger moves. ? truly surprising ? news can quickly lead to drastic moves. if the central bank of a country significantly raises or lowers the country's interest rates with no prior warning, currencies can react ?, as traders reposition themselves. likewise, a big surprise in inflation, gdp or the balance of payments can ? speculator ?. panic is also a major factor in currency moves. when there is a trouble ? part of the world, the dollar will often ? as investors rush to find a safe place to ? the storm. whether it's political instability, a national disaster or war, currency traders often run first and think later.
- trade balance・・・貿易収支
- blow out of proportion・・・誇張する
- balance of payments・・・国際収支