How is the stock market affected by currency exchange/unemployment/interest rates?, 01-23-2010 01:21 PM #1 Scolaighe Junior Member Join Date Jan 2010 Posts 10 How do currency exchange rates, unemployment numbers, and interest rates affect the stock market?
It seems these are often in the news and how prices move on the anticipation of them. How is the stock market affected by currency exchange/unemployment/interest rates?, 01-23-2010 02:05 PM #2 CIyde Junior Member Join Date Jan 2010 Posts 5 This is an interesting question, and I shall try and answer it in simple fashion. In todays time and age, movements in currency exchange rates signify movement of money from one geographical location to another as far as holding that currency is concerned. As far as the stock markets are concerned, it would be the FIIs (or foreign institutional investors) who would need to buy and sell various currencies to be able to buy or sell stocks at and through the local stock exchanges. For instance, if an FII decides that it wants to take a position in the Indian Stock Market, then it would exchange its US Dollars for Indian Rupees to be able to do so; this would cause an increase of the Rupee rate and a countervailing reduction in the Dollar rate in that re
