Forex Market Drivers

[StefGrig]

Rising interest rates strength that country's currency

A common way to think about interest rates is how much it's going to cost to borrow money, whether for our mortgages or how much we'll earn on our bond and money market investments. Interest rate policy is a key driver of currency prices and typically a strategy for new currency traders.

Fundamentally, if a country raises its interest rates, its currency prices will strengthen because the higher interest rates attract more foreign investors.

For example, higher rates in the Eurozone may prompt U.S. investors to sell U.S. dollars and buy bonds in Euros. Similarly, if interest rates increase in Switzerland, those investors may decide to sell their Euro-bonds and move into bonds in Swiss francs (CHF), driving Euros down and Swiss francs up.

When gold goes up, the USD goes down (and vice versa)

Historically, gold is a "safe haven", a country-neutral investment and an alternative to the world's other reserve currency, the U.S. dollar. That means gold prices have an inverse relationship to the USD, offering several ways for currency traders to take advantage of that relationship.

For example, if gold breaks an important price level, you'd expect gold to move higher. With this in mind, you might sell dollars and buy Euros, for example, as a proxy for higher gold prices.

Rising gold prices help major gold producers

Australia is the world's third largest exporter of gold, and Canada is the third largest producer worldwide. These two major currencies tend to strengthen as gold prices rise. You might consider going long these currencies when gold is increasing in value, or trade your GBP or JPY for these currencies when gold is on the rise.

Oil-dependent countries weaken as oil prices rise

Just as airlines and other oil-dependent industries are hurt by rising oil prices, so are the currencies of oil-dependent countries like the U.S. or Japan, both of which are massively dependent on foreign oil.

If you believe oil prices will continue to rise, you can consider buying commodity-based economies like Australia or Canada or selling oil-dependent currencies.

by Fundamental Analysis .

[Buhari]

one has to understand the key difference between the forex market and the equities market where most small individual investors tend to invest. In the equities market, one invests in a particular company's stock. If that company is expected to perform well in the future, then its stock price will go up and vice versa.

stock market tips

[Buhari]

On the other hand, the forex market is not directly influenced by economic downturns like a recession. This is because unlike the equities market, the forex market trades pairs of two countries' currencies. So, in simple terms, if one currency is losing value, then invariably the other currency is gaining value. This means that an investor can make money trading forex even in the worst of recessions. Of course, he or she needs to understand the economic factors that will make one currency more valuable than its counterpart.

Edited September 24, 2010 by Buhari

[Nikolaeva]

Very interesting information about Forex market drivers

[wizardalltime]

man you are so true , one of the most important drivers of USD is gold also the oil is one of the driver but the main driver is the American economic news .

[Scott112]

Can anyone tell me how the forex market different from the equities market.

[Bill Lawry]

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[Olivia Harper]

Forex market drivers are actually expert traders. Because for novice trader it is very difficult to just survive. Even though they can’t select their broker. But if they could select a good one than forex will as profitable and as easy for them. TradesFX is my selection of broker. I figure out this broker by short listing some regulated trading broker which goes with my scalping. Then I started using their demo platform and come to know about their potential offers.

In my one year experience with them I have never faces any issue with them. I can easily deposit and withdraw my funds. They don’t keep any minimum investment while withdrawing funds. They have wide range of trading bonus. I already enjoyed their 100% credit and 30% rescue bonus.

[Mehraj Hossain]

As a decentralized currency trading market Forex gets the most priority. Big brokers, big banks, corporate sectors are the cardinal drivers of Forex market. They are the big investors as well as indirect controller of Forex market. As a high regulated broker I selected Trade12 broker. Here I have high security of funding, narrow floating trading spread, tightest margin level and other scalping friendly facilities.

[Resolve]

On 2/28/2018 at 10:14 PM, Mehraj Hossain said:

As a decentralized currency trading market Forex gets the most priority. Big brokers, big banks, corporate sectors are the cardinal drivers of Forex market. They are the big investors as well as indirect controller of Forex market. As a high regulated broker I selected Trade12 broker. Here I have high security of funding, narrow floating trading spread, tightest margin level and other scalping friendly facilities.

 

We will need to make use of such kind of a Forex Broker which is Regulated and that is Truly International like FXOpen 🙂