Regarding Forex that needs to be understood from beginners to advanced
About Forex – Are you a forex trader? To what extent have you pursued this business? Do you already feel the benefits of doing forex business? Or are you still in the adjustment stage so there is still a lot to be improved?
For a newcomer to the world of forex, doing the trading process is certainly not an easy thing. Forex is also not a business whose profits can be directly enjoyed in the short term. Newcomers are generally often influenced by fear of things that affect the price of a currency pair on the market.
Many factors underlie changes in the price of this forex currency pair. These newcomers will guess what factors cause changes in the forex price. Simply put, the prevailing exchange rate will be likened to the rate of change in the supply and demand factors. Generally when the buyer is more than the seller, the price will rise, and vice versa if the seller is more than the buyer then the price of the currency will go down.
History of Forex and its relationship with the US Economic Lack
The US dollar has an important role in the history of printing held by the forex market. The Bretton Woods System which became the forerunner of the forex market and the formation of three financial institutions that became the foundation of the world economy and banking certainly cannot be separated from the role of the United States economy. Indeed, about forex is really just about how you understand the movement of currency values later.
Like not wanting to lose its existence, the United States economy continues to issue policies that contribute to the world currency market. The most recent thing was when Stanley Fisher, Deputy Head of the Central Bank of the United States, decided to leave his position as Deputy Leader of the Central Bank of the United States at the age of 73 years. After being nominated by former US President Barack Obama, Stanley Fisher has done a lot of work to improve the economy of the United States in recent years.
In a letter addressed to Trump, Fisher said that job growth in the United States had returned. The steps taken by Stanley Fisher made the United States financial system stronger and more durable. But this matter is predicted to be weakened by the Trump administration. The Senate also confirmed that the candidate proposed by Trump was Randal Quarles who would act as Vice President as supervisor. Though this work is very different from the position held by Stanley Fisher before.
In addition to increasing employment growth in the US, Stanley Fisher is also in the Central Bank of America Serijat or the Fed decided to keep interest rates at the lowest level throughout history. This decision was taken at a meeting of the Federal Open Market Commission (FOMC) held on 16-17 September 2015.
The exchange rate of the US dollar continues to strengthen from most major currencies as investors’ decisions take into account the latest statements from several Federal Reserve officials, including Stanley Fisher as Fed Vice Chair.Stanley Fisher said that while the United States and other countries have taken action to strengthen their housing finance system. According to CNBC, this is done to prevent future crises.
Stanley Fisher also said that the current target of the federal funds rate commission is 0 to 0.25% that is appropriate. This aims to support progress towards maximum and more stable employment. Chairwoman Janet Yellen also believes that the possibility of a rate increase can still be done before the year ends.
This interest rate also affects the value of the rupiah in the country. This decision will make a positive impact on Indonesia’s economic growth rate. The Fed’s previous decision to raise interest rates which was predicted to disrupt the existing economic growth rate. Bank Indonesia must be ready to be on the market with its monetary operations if indeed the Fed increases interest rates.
Things You Need to Know About Forex
Many things need to be considered in reviewing the forex market. Various things can trigger changes in market prices. Beginner traders can get stuck with the situation if they don’t know how to analyze this market situation.
There are two analyzes that can be done by a beginner trader to predict market value using technical analysis and fundamental analysis. Technical analysis is done by using tools that support market charts in real time conditions, while fundamental factors will provide predictions outside of these tools . Here are some other fundamental factors that are believed to be a source of changes in foreign currency prices on the market.
Regarding Forex: The occurrence of Geopolitics
Geopolitics is characterized by war, terrorist attacks and similar incidents. This has a considerable influence in the decline in foreign currency prices. If this is a safe and economically stable country, it will become a favorite destination for traders.
This has happened in recent times where the value of the Dollar has fallen lower than other major currencies. This is based on concerns about increasing military tensions between the US and North Korea. In addition, there is an issue of uncertainty about US interest rates in the future. This news also makes the Greenback under pressure.
Furthermore, the value of the US dollar slipped after US factory orders declined in July and sparked concerns in the manufacturing sector. Market sentiment weakened following a North Korean diplomat who said that his country was ready to carry out another attack on the United States.
This causes Yen to save Heaven and Swiss Franc higher. USD / JPY dropped to touch 0.08% at 108.73 and USD / CHF slipped to 0.16 at 0.9540. EUR / USD rose to 1.1944. GBP / USD is stable at 1.3038. AUD / USD fell 0.15% at 0.7984. NZD / USD fell to 0.08% at 0.7226.
Interest Rate Change
As stated before that interest rates affect forex prices . The Central Bank of each country will issue changes in interest rates in various situations that occur. In the forex market profits will accumulate within a certain period of time when a trader holds a position with a currency that has a high interest rate.
Differences in economic growth rates
Countries with high economic growth will experience an increase in value in their currencies, while economically less stable countries will make investors switch from other economically more stable currencies.
As is known if the main currency pair also involves commodity currency pairs.When a commodity country declines, for example, when a decline in oil prices occurs, then the countries that import the largest oil such as the United States and Japan will experience a decline in currency prices as well.
It is a bit difficult to predict price changes that occur now and in the future so that you can make a buy or sell order before making a profit from it. Understanding of political and economic factors is very necessary and continues to be developed along with your increasing experience in trading. Learn more about about forex which can be the development of your trading steps going forward.