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So I will admit I am very ignorant of economics, but I am interested in how current events effect currency value.

For example, Saudi Arabia announces it will not renew the petrodollar deal with the US and instead work in multiple currencies including the Chinese yuan. Yet the dollar seems to have increased against the yuan in the last few days.

Russia has been bombarded with constant sanctions and yet they manage to keep their exchange rate at around 1 ruble = .011 USD.

These events seem counterintuitive to someone without knowledge like myself, and I would like to better understand them. Any resources for the theory to help better understand the driving forces behind currency values would be greatly appreciated.

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  • $\begingroup$ You might find this collection of sources useful. None of it will apply to Russia though, that's a currency dominated by central bank intervention. $\endgroup$
    – AKdemy
    Commented Jun 21 at 17:12

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Depends on what level of understanding you want to attain.

If you just want to learn about the major drivers of exchange rates over long term you can pick some textbook like Copeland Exchange Rates and International Finance. This will give you tools to understand the direction of effect on exchange rate of various government actions or macroeconomic situations but it is not something that would equip you sufficiently to be able to accurately forecast exchange rates.

If you want some deeper insights then you should still start with basics, but after that you would wan't to read published papers. There recommendation would also depend on what are interests you the most. For example, if you are interested in volatility of exchange rate, then this IMF paper has good overview of existing literature.

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US dollar fell against other currencies on 10 June, see USDX index. CNY has two types: onshore and offshore and since it is only traded on stock exchange in Russian federation (normally currencies are not traded on stock exchanges besides in Russia), it is hard to tell what its real value is, but in the last couple of days the Yuan had indeed increased against Ruble, and so much so that it made official (offshore CNY)/USD invalid.

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