13) Positive or Negative Perception: The bid price for a counter currency is always one. Thus the exchange rate be effective (realistic and, thus, not susceptible to speculative attacks) and that the members of the union adhere to one monetary policy. The Major Currencies and how Exchange Rates are Determined: 6. Contracts For Difference What determines the value of the countries currency. The factors that follow may have a positive or negative affect on the demand for a particular country. Developing accurate currency trends is the key to successful Forex trading. The rules of this Union were somewhat peculiar and, in some respects, seemed to defy conventional economic wisdom. 3. Options Joining a monetary union means giving up independent monetary policy and, with it, a sizeable slice of national sovereignty. The member country can no longer control its the money supply, its inflation or interest rates, or its foreign exchange rates. Monetary policy is transferred to a central monetary authority (European Central Bank). A common currency is a transmission mechanism of economic signals (information) and expectations, often through the monetary policy. In a monetary union, fiscal profligacy