Finance, Forex and Investments

what has caused the misjudgment of the flexible exchange rate since 1960s?

In other words, what have been the potential causes of volatilities in the market beside the flexible exchange rate system?

Public Comments

1. 1. Domestic inflation causes traders to take money out of one currency and invest in another in order to hedge against inflation. 2. A trade deficit creates an imbalance and causes a currency to be less valuable against other currencies which are not subject to a trade deficit. 3. Low gross domestic product in actual goods. In other words, excluding intangibles, does the nation produce exportable or comestible goods or is it merely a gross consumer. 4. Political or economic instability or both can cause misjudgment and volatility. To name a few ...