There are many reasons for foreign exchange and trading between countries. Their main goal is to establish relationships between each other which would in turn open them up to many other countries internationally thereby increasing the network. The basic necessities for all irrespective of the country are the same and to fulfill all the demands it is very important for a country to establish contacts and trade internationally. Some of the other subtle things that a foreign exchange trading can do are:
When there is trading, there happens a situation to compete with the others. This reduces the cost both to the customer as well as the market dealer thus making way for more development and opportunities internationally. This makes way for recognition and helps the country to move up in the global value chain.
When there is a trade between countries, they try to establish contact with all the other presenting possibilities thereby increasing and strengthening their growth. This will open up opportunities to connect up with new countries by bringing in new market opportunities. When there is a heavy competition, of course the country enjoys a market leadership. Another point is that even the consumers of that country benefit from the lower and affordable rates that are offered to them making their purchasing power stronger. This in turn helps increase the market too by increasing the demand and supply.
When there is flourishing trade and foreign exchange in a country, there would be more employment opportunities. Many new companies will try to make their presence here expecting a good profit for them and they also get to enjoy the reasonable rates for their operation. So this serves two purposes- the companies enjoy better rates of operation and the countrymen enjoy more openings and hence a decent livelihood.
There are many factors that affect the foreign exchange market and act as a very powerful force making the prices go down badly or shoot up very high. The basis for all this is the economic changes that influence the demand and supply of commodities, stocks and currencies from time to time in a country.