Political Stability and Economic Performance
Foreign investors inevitably seek out stable countries with strong economic performance in which to invest their capital. A country with such positive attributes will draw investment funds away from other countries perceived to have more political and economic risk. Political turmoil, for example, can cause a loss of confidence in a currency and a movement of capital to the currencies of more stable countries.
Read more: 6 Factors That Influence Exchange Rates | Investopedia http://www.investopedia.com/articles/basics/04/050704.asp#ixzz46l4vgWo2
Follow us: Investopedia on Facebook