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Tech Analysis : USD/CHF
Tech Analysis : USD/CAD
Tutorial : What is Cross Currency?
Tutorial : What is PIP?
Tutorial : What is Forex Trading?
Tutorial : What are Currency Values?
Tutorial : What is Bid price and Ask price?
Tutorial : What is Spread?
Tutorial : How to get started?
Tutorial : What are the types of Orders?
Tutorial : What is Lot size?
Tutorial : What is Long and Short trade?
Tutorial : What is Leverage?
Tutorial : What is Margin Balance?
Tutorial : What is Rollover?
Tutorial : When do the deals liquidate?
Tutorial : How to analyze forex market?
Tutorial : What are Forex Signal Services?
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Major Factors affecting forex market
1. Growth
Governments tend to publish a quarterly growth figure of Gross Domestic Product (GDP). It is a crucial variable, since it is far more of a global economy. In economic cycles of expansive growth, greater disposable income which in turn implies a higher consumption and savings. Moreover, companies are encouraged by the increase in private consumption and investment. However, excessive growth could lead to inflationary pressures and increases in interest rates. In principle, a higher GDP expected push the price of the currency of the country upwards, while a push to lower the GDP decline.
2. Price evolution: Inflation
The appreciation or depreciation of one currency against another is offset by a change in the differential in interest rates. In principle, the currencies with higher interest rates can be seen due to the containment of future inflation and higher profits offered by those currencies. The macroeconomic variable continues every month. A push CPI higher than expected exchange rate upward, while if it is less than expected to push it downwards.
3. Employment
Is an indicator difficult to predict. Has a political weight and a significant immediate impact on the level of disposable income and household consumption. If the non-agricultural employment are greater than estimated, it will push the price of the currency of the country to rise in relation to other currencies. If the unemployment rate is lower than the estimate, this will encourage an appreciation of the currency of the country. The same applies to the indicator of the “Hourly Earnings.”
4. Balance of Payments
Ideally, the equilibrium level of contribution is one that produces a balance of the Current Account stable. A country with a trade deficit will experience a reduction of its foreign exchange reserves, which ultimately lowers (depreciates) the value of the currency. A cheaper currency makes its exports more affordable abroad, while more expensive imports. After an intermediate period, imports are reduced, while exports are increasing, thus stabilizing the trade balance and the currency towards equilibrium.
5. Stock markets
Economic variables such as growth, inflation, unemployment and balance of payments are not the only drivers of currency movements. The Evolution of the currencies is proving increasingly strong correlation with the asset markets, particularly with the actions. Explained in a brief and simple: a country whose market assets being regarded as “safe-haven” will work greatly to the price of the currency remains strong.
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