Transcription
It's a good car, right? I bought it for 100 thousand pesos a month ago! Now it costs only 80 thousand pesos! Why? Aren't them the same car!?
When Juan bought the car, 1 dollar was worth 5 pesos, but today, 1 dollar is worth only 4 pesos. When the dollar falls in price, all the products that are sold in dollars can be bought for less pesos, be it a ticket to Hawaii, cars, imported clothes, and others. This is what happens from the point of view of the buyer of these products. When the dollar is low, it is advisable to make purchases in pesos.
But at the same time, from the seller's point of view, something totally opposite is happening. The profit is being reduced and it is not advisable to sell in pesos. This is what happens in our environment when the dollar rises or falls. It is something that you already knew.
But why does the dollar go up and down? For you to understand that, you have to understand what goes on behind everything. Exports are increasing, and I, a soy exporter, was able to save a considerable amount in dollars. But to pay my duties and live in my country, I am going to sell the dollars to have pesos available. The economy of that country looks very growing! I am going to buy pesos to invest in that country! Hmmm... our peso is selling a lot, that is, the demand for the peso is rising and therefore the price of the peso is rising... the dollar is falling in our country... This causes a less supply of the peso, causing the price of the peso to rise even more, or in other words, causing the dollar to fall further in that country.
But as you know, the dollar goes down, but it goes up again. For example, if a country that uses the Peso as its national currency is in an economic crisis, the dollar tends to rise, that is, the peso loses value. Considering the uncertainty, foreign investors withdraw their investment and leave the country, dropping the pesos they owned, that is, increasing the supply of the peso. The demand for the peso, on the other hand, decreases. It is because new investors are no longer entering the country. There is no longer anyone who comes to put down their dollars and buy pesos. In this situation, the dollar rises, and the peso falls, in that country.
As you can see, the prices of currencies vary according to supply and demand, just as it happens with products and services. And the supply and demand of a currency depend mainly on investments and exports. To understand more about supply and demand, I recommend that you watch the video that appears in the upper right corner, where I explain in a simple way how it works.
Foreign currencies are also known as CURRENCIES, and the question of many is, how to predict the ups and downs of currencies? First, we have to understand that we live in a very complex world, where international business, foreign investment, changing trends, and endless factors make it extremely difficult to predict whether a currency is going to go up or down. Many lose fortunes trying to predict and profit from it. I think many have heard of FOREX, which is a business that is about that, predicting the ups and downs of currencies to buy them when they are low and sell them when they are high. Many call FOREX an "investment", but I call it a "gamble". But it is possible to estimate tendencies at a certain level. For example, if the US is in a crisis and starts printing more dollars, eventually the dollar will go down, because supply goes up but demand goes down.
Summarizing the content, we understand 3 things:
1. Currencies rise and fall in value according to fluctuations in supply and demand.
2. Supply and demand for foreign exchange depend mainly on investment and exports.
3. The ups and downs of currencies directly affect our lives, both in investments and consumption.
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