The advantages of floating exchange rates - Fluctuations in the exchange rate can provide an automatic adjustment for countries with a large balance of payments deficit. A second key advantage of floating exchange rates is that it allows the government/monetary authority flexibility in determining interest rates as they do not need to be used to influence the exchange rate.

The CPI is considered the most widely used measure of inflation and is regarded as an indicator of the effectiveness of government policy.

Forex markets move quickly and can take new directions from moment to moment.