# How the value of currency changes everyday?

#### thomate1

Hi friends,
I am a physics student. But I am very much intersted in Economics. But I really don't know how the value of currency changes everyday? One more thing: Everyday I read in newspapers that Sensex incresed by a particular value or something similar. SO what actually is sensex and how it varies?

Can you help me?

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#### iansmith

Staff Emeritus
Gold Member
If want a long explanation:
http://www2.sjsu.edu/faculty/watkins/exchange.htm

Briefly, the exchange is, in part, determined by the demande of the currency from foreign investor and the supply. The demand is partly drived by interest rate. For example, the interest rate in Canada has been higher for the last two years. This brings US investors (those interested bonds and other similar investment) in Canada and therefore increase the demand for Canadian money and increasing the supply of US money. So the end results is a rise of the Canadian dollar from 0.60 US $to 0.80 US$.

#### hypatia

Sensex is name for the Bombay Stock Exchange Sensitive Index - an index composed of 30 of the largest traded stocks on the Bombay Stock Exchange

#### Pengwuino

Gold Member
hypatia said:
Sensex is name for the Bombay Stock Exchange Sensitive Index - an index composed of 30 of the largest traded stocks on the Bombay Stock Exchange
Sounds like the dow jones which doesnt have a whole lot to do with currency. Isnt the main currency exchange in the US the NY mercantile exchange?

#### hypatia

NY Mercantile Exchange also deals in futures, things other then money. Perhaps in India its a all in one deal?

#### himanshu121

i think there is a derivative market too in india at various brokers

#### Pengwuino

Gold Member
hypatia said:
NY Mercantile Exchange also deals in futures, things other then money. Perhaps in India its a all in one deal?
Oh so they do deal in currency... are they the major exchange for currency or do we have a larger one?

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