Poppassion
Sorceror
So ladies and gentlemen , I'm keen of learning forex.
wondering if any1 here could give me an insight or a tip or 2.
A teacher basically.
wondering if any1 here could give me an insight or a tip or 2.
A teacher basically.
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Hi was wondering if any1 here has knowledge about Forex?
- Thread starter Poppassion
- Start date
Boomshakalaka
Squire
buy low sell high
Poppassion
Sorceror
would appreciate it much more if u could go into details etc. (News effects , global trading . . .)
anyways thanks!
anyways thanks!
spooj
Sorceror
Sure I can give you some basic principles of some things that influence forex. All these are ceteris paribus.
1. Expected future short-term and long-term interest rate of the country's bonds. If the rate is expected to increase, the value of the currency should increase, and vice versa.
2. Current interest rate of the country's bonds. If rates are higher, investors will want to pool their money in that country's debt because it gives higher returns. Ceteris paribus, the value of that currency should increase with higher rates.
3. The country's GDP, unemployment, and other macroeconomic variables. A better economy will make the country's currency value rise.
4. Perceived safety/volatility of that currency. For instance, the Swiss Franc, it's perceived to be a historically low-volatility currency, so the currency typically sees huge increases in value in times of global crises when investors pool their money in Swiss Franc denominated assets. Same for USD kind of.
5. Inflation (gauge through CPI, PPI), the higher the inflation in the country, the lower the value of the currency.
6. Kind of a secondary one but the health of the country's primary industries. For instance, many commodity-based economies such as Russia, Canada, Australia, etc. saw turbulence in their currency markets due to the collapse in commodity prices. This one kind of goes along with #3
7. National bank outlook. This one is more important with regards to current events. Many investors need to gauge what their national bank will do in the short-term (with regards to monetary policy) because it will impact most of the above variables (check out the SNB pegging and depegging the Swiss Franc from the Euro, monetary stimulus enacted by the ECB, and quantitative easing in the US for examples).
1. Expected future short-term and long-term interest rate of the country's bonds. If the rate is expected to increase, the value of the currency should increase, and vice versa.
2. Current interest rate of the country's bonds. If rates are higher, investors will want to pool their money in that country's debt because it gives higher returns. Ceteris paribus, the value of that currency should increase with higher rates.
3. The country's GDP, unemployment, and other macroeconomic variables. A better economy will make the country's currency value rise.
4. Perceived safety/volatility of that currency. For instance, the Swiss Franc, it's perceived to be a historically low-volatility currency, so the currency typically sees huge increases in value in times of global crises when investors pool their money in Swiss Franc denominated assets. Same for USD kind of.
5. Inflation (gauge through CPI, PPI), the higher the inflation in the country, the lower the value of the currency.
6. Kind of a secondary one but the health of the country's primary industries. For instance, many commodity-based economies such as Russia, Canada, Australia, etc. saw turbulence in their currency markets due to the collapse in commodity prices. This one kind of goes along with #3
7. National bank outlook. This one is more important with regards to current events. Many investors need to gauge what their national bank will do in the short-term (with regards to monetary policy) because it will impact most of the above variables (check out the SNB pegging and depegging the Swiss Franc from the Euro, monetary stimulus enacted by the ECB, and quantitative easing in the US for examples).