How Economic Factors Influence Forex Market Trends


Economy policies and terms focus on management of national and international currency values, so it directly affects the Forex market. Economic policies and conditions both influence the market trends and hence experts like Barry Sendach focus on them to judge and foresee the currency values. They analyze the economic indicators and reports to predict them in right way, here are few points that can help you analyze the economic conditions. There are few economy indicators, focused by forex market experts –

  • The economic policies include the government fiscal policy or spending/budget practices and monetary policy that further help in getting information about the government central bank that directly affects the cost and supply of currency. The level of interest rate directly reflects the monetary policy.

  • The government budget surplus or deficits usually affect the market negatively when it is expanding and influence it positively when the budget is narrowing. The results highlights the currency value.

  • Balancing the trading trends and levels illustrates the trade flow between two particular nations regarding goods and services. These trends indicates the trade requirement of the country and it’s currency demand.

  • Inflation level and trend – High inflation levels reduce the currency value in the market as it degrades the purchasing power and the currency demands are highly reduced.

  • Economic health and growth – This includes the GDP reports, retail sales, employment level, utilization capacity etc. that explains the health and growth of nation’s economy.

  • Economic productivity – The increasing economic productivity influences currency value positively.

Barry Sendach suggest people to analyze the above mentioned economic factors neatly to predict the currency value fluctuations while investing or releasing your assets in Forex Market.

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About barrysendach

Barry Sendach is President and CEO of Forex Global Solutions.

Posted on July 15, 2014, in Forex Trading and tagged . Bookmark the permalink. Leave a comment.

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