Foreign Money Exchange
Terbonne, QCSince 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.
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
• 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.