Forex - Economic Factors

Government budget deficits or surpluses: The marketplace usually reacts negatively to widening government budget deficits, and positively to narrowing budget deficits. Interest rate news has a direct impact on the international financial markets. Reports released by the government that detail a country’s economic performance are economic indicators.

Although currencies do not have an annual growing season like physical commodities, business cycles do make themselves felt. The Forex can be broken up into three major trading sessions: the Tokyo Session, the London Session, and the U.S. Session.

Economic reports such as those on unemployment numbers and housing statistics are used as fundamental indicators.

There are other economic indicators that can be used to evaluate the fundamentals of the Forex. There is little or no 'inside information' in the forex markets. The retail sales report measures the total receipts of all retail stores in a given country. The duration of the trade can be a few days, months or years.

A broker, in the forex market, is any person or firm that charges a fee in exchange for executing trades for a trader. Different dealers offer very different deals to their customers. A forex broker does not charge a commission for placing a buy or a sell order the way a real estate broker would charge a percentage fee of the total price of a sale. A forex broker is paid according to the spread or the difference between the traders bid for a currency, and the sellers asking price for that currency.

When you are doing your research of the brokers, check to see what kind of trading tools and analysis data they are offering. Other traders study price charts in order to identify such patterns.

"FX" is an abbreviation of "foreign exchange" or "forex". In the foreign exchange market and international finance, a world currency or global currency refers to a currency in which the vast majority of international transactions take place and which serves as the world's primary reserve currency. Although exchange rates are affected by many causes, in the end, currency prices are a result of supply and demand forces.

No other marketplace encompasses (and distills) as much of what is going on in the world at any given time as foreign exchange. Traders of forex commonly favor forex trading systems. The forex market is a worldwide marketplace and according to some estimates is almost as big as thirty times the turnover of the US Equity markets.