European Debt Crisis

What is European debt crisis? It is the failure of Euro, the currency that unites together 17 European countries in an intimate but flawed manner.

Over the past 3 years, Greece, Portugal, Ireland, Italy and Spain have all fallen down to the brink of collapse, threatening to bring down the entire continent and the rest of the world. How did it happen?

For most of Europe's history, it's been in a war within itself. Countries at war with each other tend to do less business with each other. Europe was always a continent of trade barriers, tariffs and different currencies. Doing business across borders was difficult. You needed to pay a fee to exchange currencies, and you needed to pay tariff fee to buy and sell to the companies in other countries. That tendered to stifle economic growth.

6 Factors That Influence Exchange Rates

Aside from factors such as interest rates and inflation, the exchange rate is one of the most important determinants of a country's relative level of economic health. Exchange rates play a vital role in a country's level of trade, which is critical to most every free market economy in the world. For this reason, exchange rates are among the most watched, analyzed and govern-mentally manipulated economic measures. But exchange rates matter on a smaller scale as well: they impact the real return of an investor's portfolio. Here we look at some of the major forces behind exchange rate movements.