The Forex market is known as the currency market. It is one of the most important markets worldwide. The daily turnover in this market exceeds $ 5 trillion, this is what gives it its importance. 40% of all transactions taking place in the London market, so is the number 1 in the currency markets.
International trade is essential to the economy of all countries, as well as investments globally, and they all give thanks to this market. The Forex market as an international market is influenced by many factors. And not only global factors, but each individual country. For example, do not affect him only the data of global GDP, but the GDP of Spain, Germany, USA, etc. And so with all indicators.
It is also important to discuss the fundamental analysis and technical analysis, because depending on the type of study some factors will be more important than others. Technical analysis is one that uses graphics, studies and indicators to know the developments that have variables here a while. Fundamental analysis is studying business from within, with the financial and economic situation, ie, what is known in Forex market as macro data, because globally and does not by each company. Then we name the most important factors, which also would include specific to each continent and country.
Type of interest
It is certainly the factor par excellence. Currency influences long term, and you have to pay the investor for the purchase of currency. Central Banks are those who are responsible for setting the interest rate and is published monthly. Forex market investors have to be very attentive to the date of publication of this data, as it can affect the market in different ways. The interest rate directly influences the money supply of a country is one of the instruments used as monetary policy and thus balance and control the country’s economy.
Inflation
We define generalized inflation and rising prices. When a country has a constant low inflation over time will mean that if you grow currency against others. Low inflation implies a decline in interest rates and a depreciation of the currency, which makes this more competitive against other currencies.
GDP
Gross Domestic Product is an indicator of a country’s health. When applying the appropriate monetary policy, central banks are set in this data. Regarding the influence on currencies, should come out lower than expected GDP, the currency would fall and vice versa. A low GDP, is a symptom of “poor health” economic.
The balance of payments, speculation or growth prospects, are other key data, but even if they are the main factors, there is a long list that can influence one way or another depending on the political situation of the country concerned, the political, or investors themselves.