Whether planning on retail foreign exchange trading or applying as a broker for a large firm or simply wanting to know what the fuss is all about, it is important to know just what the factors that affect exchange rates are. Forex trading is highly dependent in fluctuations in exchange rates and the determinants of a country’s money’s worth is varied and tempestuous. Various economic theories and models such as international parity conditions, balance of payments models and the asset market model provide theoretical and academic information about how the foreign exchange rates can fluctuate, but more reliable but ever-changing factors exist in the real world where theoretical applications maybe found wanting. Government fiscal policies or simply its budgeting and spending practices impact the exchange rate as well as its Central Banks influence and monetary policies. A countrys Gross Domestic Product, workforce and employment performance as well as economic stability and growth are important factors as well. Political conditions and stability are the more fluctuation determinants of their currencys rates.