What drives supply and demand for currencies in the Forex market?

- Higher interest rates: Attract foreign investors seeking better returns.

- Strong economic data: High GDP growth, low unemployment, rising inflation signal a healthy economy.

- Trade surplus: Country exports more than it imports → foreigners need the local currency to pay for goods.

- Political & economic stability: Safe countries attract capital inflows.

- Central bank buying: Or positive market sentiment.

- Lower interest rates: Makes the currency less attractive.

- Weak economic data: Recession signals, high unemployment, slowing growth.

- Trade deficit: More imports than exports → locals sell local currency to buy foreign goods.

- Political instability or uncertainty: Capital flight (people sell and leave).

- Central bank selling or printing money (quantitative easing).

Strong economy + high rates + exports = higher demand → currency appreciates.

Weak economy + low rates + imports = higher supply → currency depreciates.

Demand from bank customers makes exchange rates move. The customers could be corporate or whatever but their transactions are also what make the rates move