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International Finance: How to Predict the Potential Price Movements in the FOREX Market


International Finance: How to predict the potential price movement in the FOREX Market Introduction: The Foreign Exchange Market or Currency Market or.



International Finance: x crypto coin How can you predict price movements in the FOREX Market

Introduction:

The Foreign Exchange Market or Currency Market or FOREX Market is a form of exchange for the global decentralized trading of international currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock,Guest Posting with the exception of weekends. EBS and Reuter’s Dealing 3000 are the two main platforms for interbank Foreign Exchange Trading. The foreign exchange market is what determines the relative value of currencies.

Currency conversion is one way the foreign exchange market helps international trade and investments. It allows, for example, a US-based business to pay Euros when importing goods from Eurozone countries, even though the income is in US dollars. It also supports direct speculation in the value of currencies, and the carry trade, speculation based on the interest rate differential between two currencies.

Major Factors to Predicting Forex Market Movements: To profit from the fascinating world of international trade, you must have a firm grip on the key factors that affect a currency's value. We analyze five factors when making our trades. In order of importance, they are:

1. Interest Rates

(2) Economic Growth

(3) Geo-Politics

(4) Trade and Capital Flows

(5) Change of Commodity Price Index

(6) Merger and Acquisition Activity

Out of these factors, here I'm discussing about change of Commodity Price Index or " How to use commodity price to predict the potential price movement in the FOREX Market".

The discussion above shows that many factors can affect the forex market, such as supply and demand. Interest rates, economic growth, and so on. In addition, traders need to be aware that the price of certain commodities like oil can have a significant impact on certain currency pairs.

Which currencies are closely related with the price of commodities on the FOREX Market?

It is know that the economic strength of a country is directly related to its domestic industry and its international trades. Thus, the price of important commodities produced in a country can greatly influence the value of the underlying currency in the FOREX Market. According to survey, the top three currencies that have the tightest correlations with commodities are the Australian dollar (Australia is a major producers of precious metal such as gold), the Canadian dollar (Canada is a major producer to crude oil). The Swiss Fanc is a currency that also has a strong correlation with commodity prices, but it's a bit weaker than the New Zealand Dollar or the Japanese Yen. Knowing which currency is correlated to what commodity will help traders better understand the potential market movement of certain currency pairs.


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