Forex Rates
International Trade affects a countries trade balance and forex rates dependant on the net difference between a countries imports and exports. If the country imports more than it exports, their trade balance will show a deficit. If the deficit is more than the markets expect, then this data will trigger a negative price movement in the value of that countries currency prices. If the deficit is less than expected then there will generally be a strengthening or positive price movement in that countries forex rates.
Interest rates can directly affect forex rates. Generally, if a country raises its interest rates, that countries respective forex rates will strengthen in relation to other nations as global investors move funds to that country to gather a larger return on their investment. Lowering of interest rates will generally have the opposite effect on a countries forex rates.
Indicators that have the greatest impact on a countries interest rates and in turn, forex rates are the Producer Price Index (PPI), Consumer Price Index (CPI) and the Gross Domestic Product (GDP) data that is released by countries central banks.
International Trade affects a countries trade balance and forex rates dependant on the net difference between a countries imports and exports. If the country imports more than it exports, their trade balance will show a deficit. If the deficit is more than the markets expect, then this data will trigger a negative price movement in the value of that countries currency prices. If the deficit is less than expected then there will generally be a strengthening or positive price movement in that countries forex rates.
Interest rates can directly affect forex rates. Generally, if a country raises its interest rates, that countries respective forex rates will strengthen in relation to other nations as global investors move funds to that country to gather a larger return on their investment. Lowering of interest rates will generally have the opposite effect on a countries forex rates.
Indicators that have the greatest impact on a countries interest rates and in turn, forex rates are the Producer Price Index (PPI), Consumer Price Index (CPI) and the Gross Domestic Product (GDP) data that is released by countries central banks.
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home