Currency Market

Factors that affect currency rates

Factors that affect currency rates


What factors affect exchange rates?

price relations and product prices are determined by market forces called supply and demand. On the relationship of the price of the currency influence internal and external factors. In fact, when there is a demand for the currency, its value rises relative to other currencies. Conversely, when demand falls, falls and price relative to other currencies.

The consequence of the strong currency is that the price of foreign goods and services are lower than the national products and services. However, this is not good for exporters in that country, since the products are intended for export will be much more expensive than the competition. Central banks of countries or trying to keep hard currency (if the state focuses on import), or that poor posture (if the country is export-oriented, such as Japan) or trying to maintain a balance between the two ends.


Factors that affect currency rates, Currency Market, Currency Trading, Forex,



 If the good economic indicator of a country (although it is only a rumor), investors and speculators to invest their capital in the economy of these countries, which will increase the value of money in relation to other currencies. The same applies when the news that the state central bank raises or lower the interest rate (for example, increase the benefits of investments of people who keep their money in a particular currency) is published.





 How do I get a sense of the economic situation in the country?

Following economic indicators. Forex traders give much attention to governments, central banks and other institutions published economic indicators. Remember that do not significantly affect all indicators. The most important indicators are Gross Domestic Product (GDP), interest rates and unemployment.

Forex market participants after some economic indicators, under certain conditions. What we are saying is that with time, changing the focus. For example, if prices (inflation) is not a major national problem, but economic growth is then traders less attention to inflation data and monitors data and unemployment rate and GBP.

Factors that affect currency rates, Currency Market, Currency Trading, Forex,


Therefore, you should know what measures are economic indicators. To get an idea of the economic situation of the country, look at the GDP data. If inflation is your interest, see the data of the IPC (IPC) and PPI (producer price index). For information on unemployment refer to the report on unemployment in the country that interests you.

Speaking of unemployment, it should be noted that the unemployment report in the US It is published weekly and is not as significant as the Nonfarm Employment change (change of employees in the private sector) and the non-farm payroll (wage in the private sector). NFP mainly published the first Friday of each month at 08:30 am New York and is the main reason for a lot of movement of the currency market in the major currency pairs minute interval time. Sometimes it happens that in the first hour after the price rose 100 pips report and the next time the door 150 tap down. Any beginner should not be traded before and after the NFP report ... or to put it simply, the first Friday of each month, forget about the trade ... but you might want to stay next to the screen and enjoy a thriller called PFN.

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