How exchange rates are determined?
Market forces, like demand and supply fluctuates the exchange rates within the economy. In case of US Dollar to INR, if demand of US dollar increases against INR then rate of USD against INR will also increase but there are many factors which affect market condition or market forces.
Volatile Market
When market becomes
volatile investor tries to withdraw their funds from the market till the market
become stable and when US investors start withdrawing their funds then the
demand of dollar suddenly increases which leads to the appreciation of USD.
