Understanding Why Currencies Fluctuate in Forex with Brendon Yong


 

The value of currencies has a crucial role to serve in the forex industry. It is worth noting that fluctuations in their value is also important and can influence the investments made in the forex industry, says the forex expert, Brendon Yong. Such fluctuations can occur due to several economic indicators. So, today, we will be discussing these economic factors with you.

 1. Employment Data

 When an economy begins to prosper, it may be due to an increase in employment. This will positively affect the currency of that country. However, a decrease in employment could affect the economy of the said country. Thereby, negatively affecting the country's currency. This is one of the most common causes of fluctuation in currencies in the forex market.

 2. Rate of Interest

 According to Brendon Yong, the rate of interest is an important economic indicator. In an instance wherein the interest rates are higher, a greater number of foreign investments will be observed. As a result of this, the home currency's value will see an increase. As you can surmise, when the interest rates get reduced, the foreign investments may not see any increase.

 3. GDP or Gross Domestic Product

 For measuring the economic health of a particular country, the GDP or Gross Domestic Product plays a crucial role. When the economic health of a country is good, a big number of foreign investments will be made. These foreign investments will positively affect the value of the home currency, thus causing a fluctuation.

 4. Geopolitical and Macroeconomic Events

 The fourth most important economic indicator of fluctuation in the currencies includes macroeconomic as well as geopolitical events. To tell you in brief, these events include wars, changes in the monetary policy, financial crisis, elections, and other such events.

 To Put it All Together

 Above, we discussed several economic indicators which can be the causes of fluctuation in the currencies. Understanding these economic factors will help you in knowing the currency fluctuations. As a forex trader, you will find great help in making wise decisions by knowing these factors.

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