How do supply and demand diagrams affect exchange rates?
I'm curious about the intricate relationship between supply and demand diagrams and how they influence exchange rates. Can you explain the dynamic interplay between these two economic forces, and how they ultimately shape the value of currencies in the global marketplace? Are there specific factors that tend to shift the supply and demand curves, and how do these shifts manifest in the form of currency appreciation or depreciation? I'm eager to understand the mechanics behind this process and how it impacts investors and traders alike.