The
foreign exchange market
is a global decentralized market for the trading of currencies. This
includes all aspects of buying, selling and exchanging currencies at
current or determined prices. In terms of volume of trading, it is by
far the
largest market in the world.including
both short-term and long-term price trends, are the basic requirements
for any forex trades. Trends are what cause profit and loss. There are
many things contributing to
forex market price trends.
Governments and Central Banks: the monitory policy and fiscal policies
of governments and central banks include actively managing currency
interest rates and money flow. They can actively intervene in
forex market to keep the
currency exchange rates at optimum range for them.
Supply and Demand: like all other financial instruments currency prices
also depend hugely on supply and demand. If there is demand but the
supply is low, then the price is obviously going to rise, and in
opposite scenario fall.
International Trades and Transactions is Countries
that export more are bringing money into their country and countries
that import more are allowing money to flow away from their country. The
first scenario strengthens their currency over time and second scenario
weakens their currency because the more money in a financial system,
the better growth stimulus it got.
Speculation and Expectation is everyone related to a
financial system
have expectation about what the system holds them for the future. These
expectations can shape both existing and future trends. The level of
how much these expectations and speculations come true can cause
positive or negative
trends in the market.