What influences currency market rates?

 

Currency market rates

The ability to guess about direction of price in short or long terms is crucial for traders. Forex forecasts are made by thousands of experts throughout the world, though not all of them are successful. If you wish to achieve success in Forex market, you need to know which factors influence currency market rates.

Release of important news and data

Currency market rates start to move sharply prior and after release of crucial economic data. Such data includes economic indicators of the countries emitting tradable currency, the information about reduction or increase of interest rates, reports on the economic situation.

Few hours prior to start of abrupt changes of currency rates, Forex chart usually shows strong movements. Release dates of important news are well-known before and forecast on these indicators are usually published a few days prior to release.

To stay informed about these changes, you need to monitor currency rates online. Today each broker offers its traders up-to-date information about quotes. You can refer to a special widget showing the last data or simply visit website of a broker. But the most reliable method to get prompt data is do use MetaTrader4.

Your own forecast on currency market rates should account not only nearest events but also events of coming months. A simple example: if Nonfarm payrolls and other significant indicators used for fundamental analysis demonstrate growth, increase of interest rates is rather probable in the USA. It can take a few months to happen, but traders start buying USD after they receive this release. Thus, current rates change and up-trend on US dollar is to begin.

 

Political situation

Speeches of a high importance, military actions or reports of global summits may lead to uprsurge or collapse of prices of Forex charts. Effect made by these actions makes difference with the effect from scheduled release of fundamental data. Speeches of politicians may provoke fast and unpredictable movements of currencies which can lead to freeze of some rates.

Relying on technical analysis, also account for critical news that may impact on today's rates.