What is the impact of currency exchange rates on global markets?

Currency exchange rates have a significant impact on global markets. When investing in global markets, investors are exposed to different currencies, and fluctuations in exchange rates can affect the returns on their investments. If an investor holds investments denominated in a currency that appreciates against their home currency, they will receive higher returns. Conversely, if the investor holds investments denominated in a currency that depreciates against their home currency, they will receive lower returns. Exchange rate fluctuations can also impact the cost of goods and services, which can have implications for the profitability of companies and the overall performance of markets. Central banks and governments can influence exchange rates through monetary and fiscal policies, and investors need to be aware of these factors when investing in global markets.