The problems that many countries experience is that they need a stock of foreign currency if they wish to buy domestic currency at s set price. Often the case is that countries with a fixed exchange rate experience a depletion of foreign reserves, and are forced to abandon their fixed exchange rate regime. Countries with a fixed exchange rate can sell an unlimited amount of domestic currency because in most cases they usually print the currency. Exchange rates are usually quoted as the price of a foreign currency based on one unit of domestic currency. The foreign exchange market directly affects every country's bonds, equities, private property, manufacturing and all assets that are accessible to foreign investors.
Foreign exchange can also have a direct impact on a country's interest rates.
Country's that have a history of devaluing there currency relative to other countries or consistently experience a trade deficit will find that there interest rates are much higher than relative others. Traders of foreign currencies use these and other factors when determining an appropriate price for a particular currency. There are a few terms above that you may not have understood. The forward rate is the exchange rate specified in a forward contract where currencies are to be exchanged at a future point in time. Thus, you can consider the spot rate the current rate and the forward rate the future rate.