Supply and demand. The more demand for a currency, its value will rise. This typically happens to the Canadian dollar as tourist season rolls around in the summer. Americans traveling to or in Canada need to convert their U.S. dollars to Canadian.
As demand for a currency falls, so does the value of the currency.
Central banks will intervene during currency trading in order to keep trading reasonable. If the currency is rising to quickly, the bank will intervene to slow the rise. If the currency is falling, the bank will intervene to slow the decline.
Intervention by the central bank does stop the rise or fall, just to keep the movement steady.
As demand for a currency falls, so does the value of the currency.
Central banks will intervene during currency trading in order to keep trading reasonable. If the currency is rising to quickly, the bank will intervene to slow the rise. If the currency is falling, the bank will intervene to slow the decline.
Intervention by the central bank does stop the rise or fall, just to keep the movement steady.
