In a global panic, money often runs to...

The dollar, yen and Swiss franc

Why currencies move

Phones, games, holidays abroad: many prices depend on an exchange rate, the price of one currency in another. So what makes it move?
Often it's interest rates. When a country pays higher rates than others, investors send money there to earn more. Buying that currency pushes it up.
USD/JPY, January to October 2022. The Fed raised US rates fast while Japan kept its rates near zero. One dollar went from about 115 yen to about 150. The yen got much weaker.
Money from abroad counts too. Mexicans working abroad send home more than US$60 billion a year. Indonesia earns dollars from coal, palm oil and nickel. Swapping those dollars into pesos or rupiah supports them.
Surprises and fear move currencies fast. A jobs report far above forecast can lift a currency in seconds. In a panic, money often runs to the US dollar, the yen and the Swiss franc.
Common mistake
Myth: a weak currency means a failing country. Not always. The cheap yen of 2022 made imports dearer for Japan, but it made Japanese exporters' sales abroad worth more yen.
Key takeaway
Currencies move with interest rates, money flowing in and out, surprises and fear. Ask: where does money want to go, and why?

If USD/JPY rises from 140 to 150, the yen has got... WeakerUSD/JPY shows how many yen one dollar buys. More yen per dollar means each yen is worth less.
A central bank raises rates while others hold. Its currency usually... StrengthensHigher rates attract investors looking for a better return. To invest, they first buy the currency, which pushes it up.
In a global panic, money often runs to... The dollar, yen and Swiss francThese are seen as safe havens: big, trusted markets where investors park money in bad times.
Money sent home by workers abroad tends to... Support the home currencyFamilies change those dollars into pesos, rupees or rupiah. That steady demand supports the home currency.