What affects currency exchange rates in the Forex market?

Daily Currency Exchange Rates: Knowing the factors that affect daily exchange rates is of great importance. Beginners in the Forex market must understand the impact of these factors.

Forex trading or Forex is a mega market and operates through complex mechanisms based on various factors and fundamentals that may lead to success or failure in every trading we do within this market. In this article, we will highlight a number of these important and influential factors in the performance of the shops in the trading in the market and on the exchange rates of daily currencies. 

It is a good thing that this article is in the initial stage we are going through in the preparation and training of trading and training to use a number of strategies in trading on our demo account. If you are new to the Forex trading world, you should be careful to read this article well and advise you not to take any additional steps before you understand these basic things about currency trading completely. Even if you are experienced in trading for a while and see yourself as experienced in the Forex market, you should also remind yourself of these factors in the market which you have certainly realized the impact well and aware of the importance of understanding the impact more than beginners. A review of these factors that directly or indirectly affect daily exchange rates is useful in all cases.

Factors affecting daily exchange rates
Differences in markets
Many experts and observers of international markets and those who are more interested in the Forex market see that the currency market is a great deal in which there is a major fusion of data, introductions and data sources from all international developments, whether economic, financial, political or social, even natural and unnatural disasters. 

One of the reasons that prompted many to say and believe this is the absence of any other market moving, affected and reacting to these developments equally or more and faster than the Forex market. In addition, the Forex market is characterized by many features and characteristics of other financial markets, such as stock markets, commodities, stock exchanges and others. For example, the Forex market is a decentralized market, it is not held in a specific central area that displays daily exchange rates such as the stock exchange. In addition, all transactions occur through more than one means. The trader can conduct his operations through offices Telephone, internet or banking market.

When you continue trading in the Forex market for a certain period you will discover that there are two factors or two main reasons that produce large daily returns of up to $ 3 billion on a daily basis. Of these factors, the most important and the most influential of which is the "speculation sector" is responsible for about 95% of the total transactions that take place in the Forex market, and is similar to speculations and bets that take place in other financial markets and is for profit only. These speculations, which include the impact of investment banks, major commercial banks, companies and individuals, constitute what we call artificially detecting rates by using the daily exchange rate to use this to profit from price action. 

If we check a little bit of the available information about currency trading in the Forex market, we may be surprised that the majority of trading in the Forex market has a speculative nature only. The fact that experts and those interested in Forex trading know that the needs of currency conversion in all countries produce very few percentages of the overall activity of the market and its impact on the exchange rates of daily currency is limited.

Foreign sector
The second factor is the foreign sector, which is responsible for the remaining 5% of forex market transactions, and the foreign sector is the result of the exchange rate. Conducting a number of international transactions and transactions in the sale and purchase of materials and products in the world markets, in addition to the volume of demand for currency conversion between the different countries of the world. 

Currency exchange is a key element to meet all transactions carried out by import and export companies, procedures, government decisions and a number of investors who need liquidity and find in money transfers the easiest way to achieve it. It is known that the process of transferring money through networks of banks and banks directly affected by the fluctuating movement of the local currency against foreign currency. The transfer of money through banks, especially European banks, has become subject to tight financial control due to numerous accusations of exploiting these operations in money laundering and financing of terrorist groups. Many banks have decided to ban these services and stop them from their permanent customers. .

Current economic events
Economic conditions in the world, especially in the world's major countries such as the G8, which includes the largest economies in the world, "the United States, Japan, Russia, China, Germany, Italy, France and Spain", including the regional and international economic situation, And economic factors are also important and influential in the exchange rates of daily currencies.


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