Forex trading is no more difficult than trading any other assets, but traders have to remain updated with all the latest analysis to give themselves the best chance of making any profits.
Forex Market is short for the foreign exchange market. It is also known as the FX market or currency market, which enables individuals to exchange one currency to another on a current or pre-determined price. The market offers a lot of opportunities for traders, with millions and millions of money changing hands every day.
However, the value of a currency goes up and down depending on a host economic and socio-political factors. It also depends on both currencies involved. For example, the value of GBPUSD depends on the factors happening in both the USA and the UK.
Anyways, thanks to the availability of real-time value charts, trend analysis, and technical analysis tools, it’s possible to trade in the market as informed as possible.
Influential Factors for Forex Markets
For traders, it’s important to learn what are the factors that traditionally affect the forex markets in a negative or a positive way. The principal factors are:
Inflation Rates: The lower the rates of inflation in a given country, the more possibility for their currency value to appreciate.
Interest Rates: The principal instrument used by the central banks to control the value of a currency is the interest rates. In general, the higher the interest rate, the higher the value of a currency.
GDP Growth Rate: Whether the country is experiencing an economic upturn or downturn can be evaluated by its GDP rate, which in turn affects the value of the county’s currency.
In addition, economic indexes such as the balance of payments, the export/ import ratio, the level of government debts, and political stabilities all have an effect on the Forex market.
Analysis of Major Currency Pairs
Borsainside.com helps you to forecast future movements in major currencies, starting from the current situation.
Below is our analysis.
Euro vs Dollar
After months of depreciation in value due to Brexit and a wider slowdown in the European Union, the exchange rate for Euros against the US Dollars seems to be moving below the 1.10 mark. However, with the economies poised to open up and the better-than-expected manufacturing production data may push it above the 1.10 mark soon.
Dollar vs Yuan
Since 2018, the Chinese Yuan has been depreciating against the US Dollar due to multiple factors, the most important of which is the US-China trade war. It is also assumed that the depreciation of its currency benefits China. However, moving near the all-time high level, the USDCNH pair may be poised for a big correction downwards.
Pound vs Dollar
Since Brexit, Pound Sterling has seen many random moves in both ways but usually depreciated in value against the dollar over the last few years. With the rumor of the negative interest rate, the trend remains generally downwards for the time being.