The document discusses the effects of inflation and interest rates on exchange rates between currencies. It notes that if a country's inflation rate rises relative to another's, it will increase demand for the other country's currency, decrease supply, and strengthen its value. It also states that if a country's interest rates fall relative to another's, it will increase demand for the other's currency, decrease its supply, and increase its equilibrium value. The document provides examples of how these macroeconomic factors impact currency exchange rates and international trade.