A cheaper home currency means exporters convert the same sale into more domestic money, while importers of raw materials pay more. Rate differentials, the trade balance and capital flows set the level together, and when moves get disorderly governments and central banks step in to slow them.
Awaiting gradingOn July 31 the New York Fed sold euros to buy yenScore on the Fed's H.4.1 released August 6 (as of August 5): dollars borrowed by foreign monetary authorities against Treasuries moving off zero counts as the FIMA route opening, staying at zero counts as the original expectation missing.
Awaiting gradingThe won came back 115 against the dollar in a month, and not because the dollar weakenedScore on August equity flows and the rate. If foreign investors return to heavy net selling and the rate still holds below 1,450 at month end, count it as the surplus coming through, and if the rate slides back above 1,500 as selling resumes, count it as a lull.