FOREX: Causes that influence the movement of the foreign exchange market

There are great the causes that influence the course that takes the international foreign exchange market that is the market on which it operates FOREX. To know these causes is vital to do a suitable analysis of the course that can take the market in certain moment.


If the FOREX investor can interpret these factors, it will be able to buy or sell the currencies that are convenient for him according to the circumstances and obtain profit. In this article we will mention the most important causes that influence the movement of the market FOREX.


1. The balance of payments:


The balance of payments is an important factor to be born in mind when we invest in FOREX. This one consists of the determination of how the economy of a country is with regard to the rest of the world. To do this comparison between the economy of a country determined with regard to the rest of the world all the international movements of this one take into consideration country, be of entry of resources and of exit of the same ones. To be able to determine the difference between the country and the rest of the world takes every made deal, bearing in mind that every account implies something that enters but also something that goes away from the economic resources of the country. Of the difference margin between what it enters and what goes away determines the difference in the balance of payments.


The point that the FOREX investors are interested in is that this comparison between a country and the rest of the world is done bearing in mind his currency with regard to another currency that is stable and strong. For example, to do the balance of payments of Colombia the Colombian weight is compared with regard to the American Dollar.


The countries carry out all kinds of economic movements in order to stabilize his balance of payments, be to prevent his currency from depreciating excessively or more of the wished thing from being overvalued. For the FOREX investor to bear in mind these maneuvers of the governments to stabilize the payment scales is important to know when a currency can become stronger or weaken. This is especially important when one hopes that these movements of the governments should generate sudden and dramatic changes. This way, the e-trader can bear maneuvers of the such governments like increase in the money-market rates, limitations to the imports and/or exports, buy in mind or sell currencies in a foreign country, between others.


2. The interpretations that there does the market of the economic events.


It will always be a determinant factor. What moves the foreign exchange market FOREX there are no properly conditions that they do that a currency becomes stronger or weakens, but the way as the participants on the foreign exchange market interpret that a certain factor is going to influence the movements of the coins.


On the foreign exchange market there are many persons dependent on the course that is going to take this or that currency. When they observe a cause that can be a determinant in the value of a currency, they take measures in order to be prepared to these circumstances. This way, this overtaking to the circumstances determines the accreditation or the discredit of a currency. It is for it that knowledge as an important economic event is going to interpret the market is something that must bear in mind the FOREX e-trader.


3. The behavior of the professionals who administer big currencies quantities.


These professionals are persons who administer big quantities of money and his decisions in investing in this one or that currency they influence greatly the course that takes the market FOREX. This is not important when he is one or few managers those who invest in a currency, but the important thing is that often they stretch to take relatively uniform decisions, taking big capital quantities in only one felt. This influences greatly on the market FOREX.


These uniform decisions tend to appear because the managers in general are informed about the minimal and maximum ceilings that a currency has had in his history. These persons base his decisions on this index, which is called the index of support and of resistance of a currency. This way, the movements of the managers of currencies tend to be foreseeable. If the FOREX investor knows the index of support and resistance of the currencies (and it must know it, since this is a basic tool with which they all end up by familiarizing himself) and this one to so much of the movements that the managers can realize in a certain moment, it is possible that it has a quite useful tool to determine the course that will take the market FOREX in a concrete moment.


To return to the section FOREX, development.

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