Who best explains what happens in the currency exchange market?

The currency exchange market, or forex market, is best explained by supply and demand dynamics, influenced by factors such as interest rates, economic indicators, geopolitical events, and market sentiment. Traders and institutions react to these factors, leading to fluctuations in currency values. Additionally, theories like Purchasing Power Parity (PPP) and the Interest Rate Parity help elucidate long-term currency valuation trends and exchange rate movements. Overall, a combination of economic fundamentals and trader psychology drives the market's behavior.