goods markets, and the news. The balance of trade affects the exchange rate because countries are always shipping goods back and forth (O'Sullivan & Sheffrin, 2003)
If a country really needs a particular good, it will be willing to pay more for that good than it would if it did not need the good as strongly. Countries that have more leverage from a trade standpoint can also affect the exchange rates, because the balance of trade is very different for countries that are strong than for countries that are weak when it comes to trading (Sanger & Wines, 2010)