News plays one of the determining factors in which way the Forex market will precede. Veteran traders always keep an eye on country-specific Forex trading currency news that can affect the economic and political viability.
Changes in Governments or decision taken that might affect the economy hold key significance in the Forex market. Any political or economic change will have a direct influence on the Forex market which will decide how a trader proceeds.
Forex trading based on news is one of the strategies that several traders like to follow. They always remain up to date with a country’s executive-level decisions whose currencies they are trading with.
Amongst political and economic events, few other news that can affect Forex markets are:
- Central Bank
Monetary decisions made by a country’s Central Bank hold utmost importance in Forex market. At present, the Federal Reserve and Federal Open Market Committee (FOMC) of the US and the European Central Bank (ECB) of the Eurozone make changes that matter the most to Forex trading. Specifically, the monetary policies and the interest rate live currency trading news made by these banks influence Forex market the most.
- The United States
The United States holds about 90% of all Forex trades which makes it a major role to play in Forex trading. Any changes to its economic and political scenario will affect all currency pairs mostly the EUR/USD. The EUR/USD is the largest and widely traded currency pair, and any changes to the US will affect this pair and traders that take part in it.
Another news that traders keep eyes on – political and geographical conflicts. Wars have a considerable impact on a currencies exchange rate. A country already in war or that might see one have fluctuating currency rates that create volatile Forex markets. War funding financially weakens a state which makes it economically viable. Countries like the US have seen a major decline in the dollar post World War 1 and World War 2.
- Natural Disasters
Floods, earthquakes, hurricanes, and another such natural disaster can also affect a country’s currency. The 2015 Nepal earthquake made the country in need of desperate measures and also foreign exchange. Country’s with the high economy if going through a massive natural disaster has to counter that damage done to the infrastructure which in turn can poses threat to declining currency rate.
Forex trading currency news that traders keep their eyes on – elections. A new government, if formed, might bring in new policies which might affect its trade. This can cause a temporary stir in the Forex market that can lead to traders either losing money or gaining from it.
Not only elections but political unrest or a government getting impeached can have an adverse effect on Forex markets.
Forex trading currency news is one of the most popular ways in Forex trading. Numerous traders practice this method and gain significantly. However, large decisions affecting the market significantly are exceptional and can occur rarely.
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.