Group 1 - The core concept of foreign exchange rates is the exchange ratio between one country's currency and another, which is influenced by complex mechanisms [1] - Foreign exchange rates arise from international economic interactions, such as trade, investment, and labor exports, necessitating a reasonable exchange ratio for transactions [1] - The foreign exchange market is the primary venue for the formation of exchange rates, involving various participants including commercial banks, multinational corporations, and central banks [1][2] Group 2 - Supply and demand dynamics are direct factors affecting exchange rates; an increase in demand for a currency, with stable or decreasing supply, leads to appreciation of that currency [2] - Economic fundamentals, such as a country's growth rate and inflation, significantly influence exchange rates; stable economic growth attracts foreign investment, increasing demand for the currency [2] - Interest rates also play a crucial role; higher interest rates attract foreign investors, increasing demand for the currency and leading to its appreciation [3] Group 3 - Political stability is vital for attracting foreign investment, which supports the currency's value; political turmoil can lead to decreased demand for the currency and depreciation [3]