Foreign Money Exchange

Terbonne, QC

Since the important things in a choice of a money exchange broker are of knowledge to you, keep in mind

that these details are met. Never let anyone around your finances if they has not won your trust.

Article 3: Advantages and disadvantages of fixed exchange rates for foreign money exchange

Investing in foreign money exchange is a really good way to earn more side money. However, it

can have its disadvantages and really good advantages added to it. We are going to major on

fixed exchange rates of foreign money exchange.

• Being certain

with fixed exchange rates when doing foreign money exchange, companies or

individual firms can always know the exchange rates and this in turn will help them

know the risks involved less easily.

• No Speculation

With a fixed exchange rate in foreign money exchange, the possibility of minimal

speculation is high. If companies and individual firms participating in foreign money

exchange believe that the rate will stay fixed, there will be no devaluation and


• Government policies

When the exchange rate is fixed, the government in place will be cut down and be

unable to pursue irresponsible or rather extreme macroeconomic policies as these

would cause a run on the foreign exchange reserves.

• Response to Shocks

When the exchange rates are fixed, the government in discussion may be unable to

respond to shocks especially when firms are rapidly investing in foreign money

exchange as the response may be slow to balance the crises given the foreign money

exchange transactions being made.

• Speculation

If foreign money exchange markets believe that there may be revaluation or

devaluation, the possibility for speculation is going to be high. The process of

countering this may cause the government a big blow given their foreign money

exchange terms.

• Policy conflicts

The fixed exchange rate for foreign money exchange rate may turn up to be of no

similarity to other economic targets for growth, inflation or unemployment, and this

may cause conflicts especially in government policies. This can be verified if the

exchange rate is fixed at a level that is necessarily not too high nor too low.