Learn to know the 4 factors affecting Forex Movements

Learn to know the 4 factors affecting Forex Movements

The action of buyers and sellers worldwide that participate in the movement of forex make billions of dollars every day. In fact, Forex/forex trading has become a global event when economic events played a role in the forex market.

Here we will learn about some of the economic trends and events for those who are new to forex.

The forex market is mainly driven by factors of macro-economic decisions which affect the traders to determine the value of a currency at a certain time (follow forex trading education). A country's economic health is an important factor in the value of its currency due to the large number of economic events and information are subject to change daily. In turn, it affects the price of pegerakan.

Let's take a closer look, it is 4 factors influencing changes in the movement of currency values.

The capital markets

The capital market is the most visible indicators of health related to the economy of a country. The strengthening or the fall of the stock market in one country is usually the economic signals in the eyes of investors.

Forex traders rely heavily on economic data so that in many cases the same economic data will have a direct influence against market movements.

International Trade

The level of trade between countries represent the demand for goods or services from a country. The higher demand will normally have an impact on the strengthening of the currencies of these countries. Example: to buy goods from Australia, an importer who come from outside Australia must convert their currency to Australia dollars (AUD). It undertook to increase the demand for the AUD, so that will give the effect of reinforcement for the AUD.

Surplus and deficit of the trade balance is an example of a country's economic data in terms of international trade. If increased surplus deficit – or reduced – thus the countries currency will usually be strengthened. Conversely, if the surplus is reduced – or deficit increases – then usually the countries currency will weaken.

Political conditions

The political situation of a country also play a major role in the country's economic prospects and will have an impact on its currency. Forex traders will continue to monitor the news and political events to measure the economy-related currencies.

The election is a big event for the currency. The exchange rate strengthened if the parties have a program and a good influence for the economy came out as the winner of the election. In short, if the winner of the election was the party that "coveted" by the market, then the country's currency will be strengthened.

Monetary and fiscal policy of the Government is the most important factor in economic decision making. The central bank's decision against a sharp impact interest rates also affect the forex market.

Economic Reports

The economic calendar report to be very important when the price moves quickly in the market. Report on GDP (gross domestic product) or GDP (Gross Domestic Product) is probably the most obvious economic data, because it is the basis of a country's economic strength.

Inflation is also a very important indicator as it is an indication of increased prices and purchasing power. However, inflation is a double-edged sword where often there is pressure on currencies when purchasing power is declining. On the other hand, it can also lead to the appreciation of the currency because it may force the central bank to raise interest rates in order to control inflation.

Other reports such as sector jobs also brings important information about the economic strength of a country. One of the sector's jobs data which becomes the Prima Donna in forex trading is data of U.S. Non-farm Payrolls.

Piratebay 5:18:00 AM Komentar