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What are some factors that affecting the currencies?


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Well, i am a newbies in frorex and i have some question about it.

I just wanted to know what makes currency Rise or Fall? When is better to trade or not to trade.

Can you give me some factors that has an effect in the currencies.

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  • 4 months later...

The rise and fall of the currency pairs mostly depends upon the economic and political conditions of a country. Important financial news keeps on release from time to time, such as Interest rates, production news, GDP report etc. which decides the economic condition of a country and causes the fluctuation in the Forex market.

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  • 2 months later...
  • 2 weeks later...

It depends, I think, on the major products of a country. Like for example, oil. I thought, initially, that oil affects all major currencies that when the trouble began in the Middle East, these currencies will suffer because oil prices went up. It turns out that only Canada gets affected in major way when oil prices goes up or down.

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  • 3 months later...

The interest rate is one of the common factors or economic events that affects currency trading. This is because when the Central Banks increase the rates, the currency tends to strengthen but when the rates are lowered, the currency tends to weaken. With this basic knowledge, traders can take advantage of the markets.

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  • 11 months later...

There are so many factors that can affect the currency that's why we must really be updated with the latest news because that is where we can get ideas from what might be the possible movement of that currency. It has really a big affect what's happening into that particular country so you have to follow the trends.

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Indeed. There are many factors that greatly affect the market and either affect or influence the traders decision and analysis. So, those Forex events are the major or the mostly make the market move or become volatile. We should think on how to take advantage of it or to use to prevent possible losses and that we can have awareness in the different pairs.

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  • 10 months later...

There are a lot of factors like interest rate, employment rates, news release and stuffs like that. That is why it is quite necessary for the trader to keep up with all these. That makes it look more like trading around news time is always the preferred means of trading by a lot of people because of the higher degree of accuracy. The major mover in Forex is news.

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economic news and traders reaction to particular events make the price move in high range. market constructors are traders. if no traders involve in market, the price will move flat. if traders expectation to the particular economic situation very high, the price will start to move.

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one of the factors that cause changes in the currency is Official interventions

 

Governments or central banks could intervene to prop up a currency – for political or economic reasons - by buying it on the international markets, or by raising interest rates. The John Major government in 1992 controversially raised interest rates by five percentage points and spent billions in a doomed attempt to keep sterling in the European exchange rate mechanism (ERM).

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government policy in economic could affect in traders expectation regarding with price rate. it make the market move in particular direction. don't forget also about natural disaster. which the impact in large scale which make the economic situation paralyzed. such terrible events could affect the market.

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The rise and fall of the currency pairs mostly depends upon the economic and political conditions of a country. Important financial news keeps on release from time to time, such as Interest rates, production news, GDP report etc. which decides the economic condition of a country and causes the fluctuation in the Forex market.

Yes I would also agree with you, that it depends on the government's policies towards economy and also political conditions of the country, on other hand it may depend on how much debt is a country has fallen into these factors are changing the currencies value, mostly countries with very strong currencies are those with oil such as Kuwait and Saudia Arabia (Middle East side).

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For me personally what that do affect the forex market is nothing but the economic situation of any country this comprise the rise and the fall of a trader ;

if you dont listen to news very well then dont trade with fores as the reaction of the market is base of the dundamental

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Sometimes also, I feel there are those things that affect Forex which goes beyond the usual economic conditions that we know. I feel there are big companies that could have some special effect or turn things around in Forex. They could influence the market prices with the level or size of their capital base. I feel there are really somethings that go around the Forex market that remains invisible to the average trader.

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The main factor in the forex trading for movmement is the news of country.The news effect on the currency.If any big news published then you are show a very big movement on the market and also sometime the market maker are invest big money and they are trade for that you are showing big momvement on the market.

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many thing could affect the price movement. political and economic news mostly drive the market. however, there are unexpected disaster which potentially can make the market move too. such as war, or natural disaster which the impact make a country economic being paralyzed.

I agree with you. It is the economic news that used to affect the currency trading business very well because when there is economic melt down in the big countries, it is going to affect the country so bad that they will have to suffer a reduction in the value of their currency. A very bad economic situation of any of the countries will be able to make changes in the forex trading business.
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