Large, advanced economies like the United States, Japan, and the euro area generally:

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Large, advanced economies like the United States, Japan, and the euro area generally allow supply and demand to determine exchange rates. This is to promote the efficiency and flexibility of the exchange rate system in response to changes in economic conditions. In these economies, exchange rates are generally flexible and can fluctuate in response to changes in economic fundamentals such as interest rates, inflation, and economic growth. The central bank may intervene in the foreign exchange market to influence the exchange rate, but ultimately, supply and demand forces determine the exchange rate in these economies.

Large, Advanced Economies Like the United States, Japan, and the Euro