E-mail :

Password :

Forgot Password? | Sign up for Free

How Global Events Impact the Forex Market

Posted by : Premraj | Posted on : Sunday, February 18, 2018


The Forex market focuses on foreign exchange and this is now the largest financial market in the world.  Each day, participants from around the globe engage in over $4 trillion worth of foreign exchange transactions.  As the forex market is such a global marketplace, different events from all over the world can immediately affect currency value and exchange rates.  Here, we’ll discuss a number of global events that can influence the forex market.

Political Events

As an investor, you may wish the head of government remained neutral on matters that could impact the Forex market.  Perhaps you would like them to hold off on their latest Brexit speech or brush over a key policy matter?  Important keynote speeches can play havoc with your current investment strategy.  Any election – in almost every nation – can directly impact the country’s currency.

Elections are often viewed by traders as events that can potentially impact the bottom line, which will typically equate to greater volatility in the country’s currency.  Unexpected elections or an unexpected vote can cause major upheaval.  These events can often cause prolonged political instability.  New research from ETX Capital highlights how large fluctuations in the value of sterling can be seen directly after Theresa May’s speeches.

Last year, we saw the pound rate fall against numerous currencies, including both the dollar and the euro.  May’s speeches that outline her approach to Brexit certainly has a significant impact on short-term movements.  Just a week after voting to leave the EU, the pound hit a 31-year low against the dollar, however, after the announcement of her premiership, the pound had recovered to trade at $1.32.   Theresa May’s support of the Remain campaign was definitely a welcomed piece of information from investors.  Conversely, sterling dropped by 0.4% against the euro after her keynote speech at the Conservative Party conference on 5th October 2017.  It’s clear to see that May can have a significant impact on the Pound, which will directly impact the Forex market.

Natural Disasters

The fallout from any natural disaster can often be catastrophic for a country.  Natural disasters including tornados, floods, hurricanes and earthquakes can have a detrimental impact on a country’s infrastructure and citizens.  These types of disasters can also have a negative impact on a nation’s currency.

After any natural disaster, infrastructure damage is always a key concern.  The additional costs associated with clean up and rebuild after a natural disaster can impact on government and private spending.  If you then add a probable decrease in consumer spending due to new economic uncertainty to this, it’s clear to see how a natural disaster will almost surely hit currency levels hard.

Determining the Bottom Line 

These are just a couple of events that can have a significant effect on currency markets.  As you can see, the key point to take away from this is that much of a currency’s value is derives from the economic strength of a country.  Any unforeseen uncertainty in predicting future economic output will have a negative impact on currency levels.  Regardless of whether you’re a novice in the Forex market or someone with a well-planned strategy, it’s important to take into consideration how global events can impact the Forex market.

Comments : Post a Comment | Category : forex | Tags :

The number of people with a lack of savings for retirement is skyrocketing with 69 percent of Americans having less than $1,000 in savings, according to Go Banking Rate. The good news is you don’t have to forgo your retirement dreams if you’re facing a financial crisis in retirement, or you just need supplemental income […]


Budgeting for Savings Can Help You Avoid Debt

When it comes to how Americans handle their finances, the statistics are deeply concerning. For example, only 24% of millennials understand basic financial literacy, according to the National Endowment for Financial Education. What’s more, forty-six percent of Americans have emergency savings of $1,000 or less. That is why financial experts suggest the importance of a budget. […]


If we are to take a poll of what people all over the world want to have the most in life, owning their personal property will surface more than a few times. Having your own home is a relief. The burden and stress embedded with paying rent can be quite weighty for a lot of […]


Money tips for the Small Business

Your small business is starting to progress, and you need some advertising to take it to the next level. Rich companies can afford billboards across the nation and dedicated slots during commercial breaks on television, but advertising isn’t always about reaching the most people at once. Your business offers a service or product that is […]


Medical insurance in Singapore, as well as Medisave, may not cover a lot of medical expenses that you might incur during hospitalisation. This might leave you in want of cash, especially when medical emergencies arise. A few examples of exclusions from medical insurance are dental treatments, cosmetic treatment, infertility treatment, and medical coverage overseas among […]


Technology has a way of being amazing and frustrating all at once. When email is working well and videos are streaming and not buffering and your television, smartphone and other devices are doing what they are supposed to do, life is good. On the flip side, our gadgets can be immensely maddening when they crash, […]


Choosing a career can be difficult, especially if there are many different things which interest you. However, a career in finance can be truly rewarding, and as salaries go, finance professionals earn some of the top dollar rates in the country. If you think that finance might be for you, do you know how to […]


We live in fascinating times when technology has taken over almost all sectors of human life. These advancements are also changing at a swift rate where progressive companies are embracing these trends to gain significant traction and create massive value to their brands. Companies have been able to venture into new markets both locally and […]


The Internet is a miracle of science and modern communication patterns. There is no industry that has been left untouched as the series of tubes has overtake the country and the world, sending packets of data through the wires and the air. The ease and flow of information is truly revolutionary. That is where interactive […]


Gold is the traditional safe-haven asset for traders and investors when equity markets turn south. It seems disingenuous that the gold price is rising, while Wall Street is rallying. Consider the current state of US bourses: –The Dow Jones Industrial Average is trading at 26,080.72 points for a 1 month gain of 5.36% –The NASDAQ […]


Free Budgeting software to better manage your money

Register for FREE, Learn More or Watch the Video