Foreign exchange trading is a mammoth undertaking, with more trading occurring than in the stock market and all other trading combined. Foreign exchange trading, or Forex trading for short, is the practice of using the currency of one country to buy the currency of another. Because of the continuously changing exchange rates, variations in prices occur and investors can use these price differences to make profits. There are a number of factors that affect foreign currency trading. Some of these factors include: government budget surpluses or deficits, trade surpluses or deficits, inflation and countries economic growth and health.Governmental Budget Surpluses or DeficitsA country’s ability to govern within the money available in its budget is a huge factor in its overall fiscal health. Foreign exchange trading views a budget surplus as a favorable factor in the worth of a currency while a deficit can lower the value of a currency when trading Forex. Such a theory is evidenced when the United States announces its annual budget or makes monthly statements about its fiscal standing and the Forex news and markets adjust based on the reports.Trade Deficits or SurplusesThis is another economic factor that can have a huge impact on the Forex… Read full this story
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