floating change rate appreciations and depreciations

Question 1

appreciation due to demand (why)

Answer 1

-increase in relative interest rates
-speculators anticipate rise in pound
-increase in FDI
-rise in incomes abroad

Question 2

depreciation of exchange rate due to supply

Answer 2

-fall in interest rates
-speculators move away
-firms move away from Britain (fall in FDI)
-increase in incomes domestically