الجمعة، 1 أكتوبر 2010

Basic understanding of the Forex market and what affects the prices of currencies

. What is the cause of fluctuations in the underlying exchange rates and / or technical factors. .• Political conditions• actual cash flows (inflows of imports and exports and mergers and acquisitions) and expectations of changes in cash flows.

• the main news is released publicly, often on scheduled dates and times include:(A) economic policy laid down by central banks,(B) economic conditions in general, and exposed through economic reports (GDP growth, inflation, unemployment, and relative interest rates, budget deficits or surpluses, trade, consumer confidence, etc.).• Market Psychology
Political conditionsCan be internal, regional, and political conditions and international events have a profound effect on the currency markets. All exchange rate vulnerable to political instability (before the elections, for example) and expectations about the new ruling party. Political unrest and instability can have a negative impact on the economy of the country. Also, in one country or region may spur positive events or negative interest in a neighboring country, may affect its currency.Cash flowsAnd mergers and acquisitions can create a large demand in many cases, temporary for a particular currency that could cause the currency to strengthen. Trade flow between countries illustrates the demand for goods and services, which in turn indicates demand for the country's currency to conduct trade. Surplus and deficit in trade in goods and services reflect the competitiveness of the country's economy. A large trade deficit (imports> exports) and usually have a negative impact on the country of the currency.Economic Policy• Fiscal policy that is essentially the way in which the government chose to manage the revenue (tax) and expenditure (spending on education, health and defense). The difference between the two is the inability of the government / surplus. Country's currency usually reacts negatively to widening government budget deficits, and positively to narrowing budget deficits

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