Forex Economic factors that influence forex

[FXOchartist]

Have you ever thought about what causes currency values to change? Maybe you have experience when exchanging currencies getting different values for the same currency. One of the reasons is that the currency exchange rate has changed so that even if you exchange the same amount of money, you get a different value.

Various factors influence changes in currency values from an economic perspective. Knowing these factors can increase your forex knowledge which is useful for making trading decisions.

Citing to FXOpen blog, several economic factors affect forex, here is a summary.

• Economic factors
• Economic health, GBP, inflation rate, unemployment rates, trade and current account balances, and inflation data
• Central bank policy, interest rate, quantitative easing, and more.
• The influence of capital markets, Commodity, stock, bond, and other markets.
• Export and import.
• Government Debt.
• Trade-Weighted Index. measure used in international economics and finance to assess the relative strength or value of a country's currency against a basket of other currencies.

The forex market is very complex, understanding all the variables that move the market may be difficult, but understanding the basics of these factors can help make trading decisions.

 

[Holicent]

The forex market is very complicated and should be engaged with caution anytime. The forex market has its shortcomings in that it can be influenced by so many events. When we talk about events like, inflation, economic stability, exchange rate, apex bank policy, interest rate, debt owed by such country, currency rate trade

 

[FXOchartist]

The forex market is very complicated and should be engaged with caution anytime. The forex market has its shortcomings in that it can be influenced by so many events. When we talk about events like, inflation, economic stability, exchange rate, apex bank policy, interest rate, debt owed by such country, currency rate trade

Yes, that's right, the forex market is indeed influenced by various factors that can trigger market players to take action. By following updates on the latest news on global economic conditions, traders can make the right decisions, because, besides the potential profits from forex trading, there are also risks on the other hand.

 

[Ramolak19]

Interest rates, inflation rates, GDP growth, employment data, trade balances, and fiscal policies are some of the economic factors that affect currency rates. While excessive inflation can devalue a currency, higher interest rates typically draw in foreign investment and help it gain strength. Strong economic performance can result in currency depreciation, whereas positive economic indications typically lead to currency appreciation. In the currency market, traders and investors keep a careful eye on these variables.

 

[moonchild]

there's a lot of economic factors that influence the forex markets and day before yesterday was cpi and the market drops around 600pips on us30 and 400pips on Gold which signifies the strength of the US economy, many traders made money trading the news, I think of economic factors as catalysts for market movements.

If you look at Gold, it has been ranging for quite a while through out the day but after the economic news release it shoots down and also started a downtrend, and it's still sinking further, news also signifies the strength of an economy in relation to the US dollar.

 

[FXOchartist]

there's a lot of economic factors that influence the forex markets and day before yesterday was cpi and the market drops around 600pips on us30 and 400pips on Gold which signifies the strength of the US economy, many traders made money trading the news, I think of economic factors as catalysts for market movements.

If you look at Gold, it has been ranging for quite a while through out the day but after the economic news release it shoots down and also started a downtrend, and it's still sinking further, news also signifies the strength of an economy in relation to the US dollar.

We need to focus on the news time, missing the news time could disappointment to us because missing a good opportunity, despite not all the time news gives a high impact, with the focus we can create a trading plan accordingly, reading the news I often use FXOpen UK economic calendar to do so then looking other resources like forexfactory