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Foreign exchange margin trading fundamental analysis

{}Posted in2023/2/25 0:31:22 | 6Browse

The price of foreign exchange reflects a balance between the supply best forex rebate company demand for money two of the most important factors affect fxrebatecentralg the supply and demand are interest rates and economic performance, in the economic indicators, such as gross national product, foreign capital inflows or international cashback forex represents a countrys economic performance, but also determine the supply and demand for the countrys forexrebatecommission every day The most obvious difference between fundamental analys rebatesforexbroker and technical analysis is bestforexrebatecompany fundamental analysis studies the causes of market movements, while technical analysis studies the effects of market movements. When valuing a countrys currency in terms of another countrys currency, fundamental analysis includes the study of macroeconomic indicators, asset markets, and political factors. Political factors affect trust in a countrys government, social stability and confidence in the basic theory of interest rates. However, if interest rates are too high, it is bad news for the stock market, as investors will move their money out of the countrys stock market and cause the price of the countrys currency to fall. These indicators can be used as a reference to judge the direction of interest rates before central banks (BOE, FED, ECB, BOJ) meet to decide on interest rates International trade in a countrys trade balance can be seen in the net difference between imports and exports over a period of time, when a countrys imports are greater than its exports, it will produce When a countrys imports exceed its exports, a trade deficit is created, which is usually not good news. From a countrys economic point of view, a trade deficit is not necessarily a bad thing, but if the deficit is larger than the market expects, it will have the opposite effect. If the prevailing market rate is $1.70 per pound, then the pound is said to be an undervalued currency and the dollar is said to be an overvalued currency. Another shortcoming is that it applies only to goods, ignoring services, which can have a very significant value differential. After the 1990s, the theory seems to be applicable only to long cycles (3-5 years) in which prices eventually move toward parity. If the U.S. interest rate is higher than the Japanese interest rate, then the U.S. dollar will depreciate against the Japanese yen to the extent that the future rate is reflected in the forward rate specified at that date, depending on the prevention of risk-free hedging In our example, the forward rate for the U.S. dollar is considered to be discounted because the yen purchased at the forward rate is less than the yen purchased at the spot rate The yen is considered to be appreciating After the 1990s, there is no evidence that interest parity is still valid Contrary to this theory, currencies with This model assumes that foreign exchange rates must be at their equilibrium level - that is, the rate that produces a stable current account balance - and that countries that run trade deficits will see their foreign exchange reserves decrease and eventually their A cheaper currency gives the countrys goods a price advantage in international markets and makes imports more expensive. After a period of adjustment, imports are forced down and exports rise, thus stabilizing the trade balance and currency toward equilibrium. In other words, money not only chases goods and services, but also, more broadly, financial assets such as stocks and bonds, and such capital flows enter the capital account item of the balance of payments, thereby balancing the current account deficit. The rapid expansion of trade in financial assets (stocks and bonds) has led analysts and traders to look at currencies in a new light Economic variables such as growth rates, inflation and productivity are no longer the only drivers of currency movements The share of foreign exchange transactions originating from cross-border financial asset trading has dwarfed currency transactions arising from trade in goods and services The asset market approach views currencies as the prices of assets traded in efficient financial markets As a result, currencies are increasingly showing their close correlation with asset markets, particularly equity markets In particular, equities are closely linked
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