Big topic with plenty of proposed answers, none of which works particularly well. There is a summary of common ones here: http://www.economicsdiscussion.net/fo

Big topic with plenty of proposed answers, none of which works particularly well. There is a summary of common ones here: http://www.economicsdiscussion.net/foreign-exchange/theories-foreign-exchange/theories-of-exchange-rate-determination-international-economics/30637 http://www.economicsdiscussion.net/foreign-exchange/theories...