Candlestick Trading Blog
August 29, 2008
Currency Market
Currency Market Influences The currency market, also known as the forex market, consists of trillions of dollars exchanged daily. It is the largest market for trading and it continues to grow as more investors learn to trade currency. The basic goal when trading currency is to trade one nation’s currency for another, with the goal to buy a nation’s currency at a low price and then to sell it at a higher price. Also known as foreign exchange trading, currency trading can be very risky since the market can swing both ways within seconds. Today’s article will list some of the most popular forex markets available as well as different factors that affect the forex markets. First, let us take a look at the different foreign currency pairs available for investors to trade in the currency market. • USD / JPY - US dollar to Japanese yen exchange rate • CHF / USD - The Swiss franc to US dollar exchange rate • AUD / USD - The Australian dollar to US dollar exchange rate • CAD / USD - The Canadian dollar to US dollar exchange rate • GBP / USD - The British pound to US dollar exchange rate • EUR / GBP - The Euro to British pound exchange rate • EUR / USD - The Euro to US dollar exchange rate • EUR / CHF - The Euro to Swiss franc exchange rate As promised we will also discuss the factors that affect the currency market. 1) Economy – It is no surprise that the economy affects currency trading since the economy directly affects the currency of each country. Obviously the more prosperous a country is the more valuable their currency, but there are other factors to consider when looking at the economy. Things such as the budget deficit and surplus as well as inflation trends and the overall economic growth of a country will affect this market. Additionally things like the gross domestic product (GDP), retail sales, and employment levels will affect the value of foreign currencies. 2) Political Stability – The currency market is also affected by the stability or lack thereof for each country. Countries whose political sectors are in turmoil will negatively impact the value of their currency, whereas increased stability due to overcoming political issues, can positively affect its currency. 3) Investment Psychology – This concept while new to some forex traders is a concept that has steadily become known to the investor community. Not only do the perceptions made by traders greatly influence the currency market, but it also is a concept studied by many investors who are learning to deal with trading anxiety. Emotions drive the market, and successful forex traders are learning how to experience controlled emotions in order to obtain success in their trades. There is a lot more to the forex markets and you should continue to research articles online in order to practice successful forex trading. Learn the different methods available and keep up to do date on the factors that influence the value of a countries currency. Online Stock Market Reviews presented live via the internet by Stephen Bigalow |
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