As a forex trader, one of the things you always need to be mindful of is the currency. But there’s a lot to it. It’s not just the current value that one should know about. The exchange rates of currency are tremendously important. And therefore one should always be aware of these rates. It is of particular importance since these rates keep fluctuating. If you aren’t aware of the current rates, you’ll be open incurring losses. Thus having an api forex data always helps.
More to exchange rates
Now the exchange rate is not just what you see on face value. There’s so much more to it. In other words, you need to get more out of these rates. The exchange rate is simply the value at which you get one currency for another. This is something people do every day during international money transfers.
Why is it needed?
There is a buy rate and a sell rate. These terms are fairly obvious. But there’s one rate that is more important. And that is the mid-market rate. This rate is sort of a midpoint. That means this rate is somewhere in between both the buy and sell rates. Now global currencies values keep changing. As a result, both buy and sell rates keep fluctuating. And therefore, mid-market rates keep changing as well. Now if one wants to be aware of these changing rates, he has to have api forex data. This will be a digital application that keeps you aware of all the necessary data. Such data will also include currency values and rates.
Anyone who has been in financial markets for some time will know how fast these rates can change. But these rates don’t just change for the sake of change. There are a lot of reasons behind such fluctuations. A lot of determining factors play a role.
This is one factor behind currency rate changing. For example, a country where inflation rises, currency values decrease. Therefore if you live in a country with low inflation values, your purchasing power is more. As a result you currency value will be more than others.
• Interest rate
This is another determinant. In fact, interest rate and inflation are both related to exchange rates. Large banks play a big role in determining exchange rates by manipulating interest rates. Thus it’s easy to see how they can influence currency rates as well. Api forex data will let you know about interest rates too.
• Balance of trade
Any country needs to export for economic progress. Now if it imports more than it exports, there will be a trade deficit. In case of a debt, currency rates go down. Again, in the event of surplus, the value of currency increases.
So you see there’s so much one has to be mindful of. There are a lot of things that affect currency rates. And one has to process so much. Thus it is better to have api forex data. It helps you know changing rates.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.