Live Forex Rates in a very simple tool and especially in a conjunction with the Currency Heat Map below will help you to gain an overview of what is currently happening in the forex market. Thanks to the tools below - you can easily see the weakest and the strongest currencies in real time. Plus you can measure and compare currencies both in pips as well as percentages.
Forex is a fast-paced global market that remains to be a major domain for central banks, financial institutions, corporations and individual investors. One of the most important tools that influences this market is exchange rates. The forex exchange rate is the value at which the price of one currency can be exchanged with another. Fluctuation in this rate represents policy-based or monetary response for the economic indicators that assess the economy. Basically it has the ability to move the market instantly because a particular component of the country's fundamentals has seen a sudden change. In fact, the immediate change in FX rates are known to be a huge impact, as it results to volatile movements causing quick response and profitable returns.
How Are Forex Rates Calculated?
The Central Bank appoints board of directors for analyzing and controlling monetary policies of the governing country, and the main idea that banks utilize is burrowing capital. Once the economy grows, the rates are increased for curbing inflation and when it does not do well then the rates are decreased for promoting lending and incorporation of money into the economy.
Traders can get an in-sight about the plan of Central Bank by scrutinizing a few economic indicators including
Consumer Spending, Retail Sales
Consumer Price Index (CPI)
When the rate of return is more then more will be the interest on the currency invested and higher will be the chances of profits. It means, a certified strategy is to borrow the currencies at a much lower rates and buy them when their interest rates are higher. This strategy is termed as carry trade. But it comes with a risk of currency fluctuation that can off-set the anticipated rewards.
Predicting The Forex Rates
With the help of indicators along with an assessment of economy, traders can have an estimate of the Federal Reserve System's rate changes. A golden rule is: Growth in economy showcases the rates will neither rise or drop rather they will be maintained. Similarly, a drop in the indicators depicts a cut in the exchange rates.
Other than the common economic indicators there are two areas that must be examined, and they are
Major Announcements: Whenever the Central Bank schedules to declare a major announcement then this can provide a deep in-sight about what the current views of the bank is regarding inflation and how the monetary policies will be planned.
Forecast Analysis: Considering the analysis of professionals (technical and sentiment analysis) can even be beneficial for predicting forex rates. These rates are often anticipated beforehand, due to which analyst or professional traders try to come up with a consensus estimate so as to what the value of rate can be.
How To Act During Sudden Change in Forex Rates?
There are times when predictions can work against you and in during such period the first and most important step is to be quick. This because movement in forex market takes place at a lightning speed, where traders would compete with an hope to enter into the ideal position. But be aware of the chances of volatile trend reversal. The emotions or perceptions of the trader can affect the market right after the rate is released, however after logic strikes then it is likely for the trend to reach its original position. To survive in the forex market, always use proper money and risk management system.
High Risk Warning: Please note that foreign exchange and other leveraged trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved, seeking independent advice if necessary.
Any opinions, news, research, predictions, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. FX Trading Revolution will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.