How can seasonal trends impact currency exchange?

Increased tourism can significantly affect demand for certain currencies, making this the correct answer. When there is a surge in tourism, there is typically a higher demand for the currency of the destination country. Tourists need local currency to make purchases, which leads to an influx of that currency into the market and can strengthen its value against other currencies.

For example, during peak travel seasons, such as summer holidays or major festivals, countries that attract a large number of international visitors may experience an increase in currency demand. This can enhance the currency's strength due to the heightened activity in foreign exchange markets as tourists exchange their home currency for the local currency.

In contrast, other choices suggest limited or negative influences on currency exchange. While certain seasons might impact market volatility or specific economic events, the broader impact of tourism on currency demand is a more direct and observable relationship. National holidays do influence currency value to some extent, but they do not have as widespread or consistent an effect as changes in tourism volumes. Lastly, the statement that seasonal trends have no impact on currency exchange overlooks the significant role that factors like tourism play in influencing currency demand and value, particularly in countries that rely heavily on international visitors.