Monday, January 25, 2021
  • Bizna Club
  • Directory
  • SME Awards
  • YEA Awards
  • Login
Bizna Kenya
  • SME
  • AGRIBUSINESS
  • SAVINGS & INVESTMENT
  • AUTO
  • REAL ESTATE
  • NEWS
  • EDUCATION
  • HEALTH
  • TECH
No Result
View All Result
  • SME
  • AGRIBUSINESS
  • SAVINGS & INVESTMENT
  • AUTO
  • REAL ESTATE
  • NEWS
  • EDUCATION
  • HEALTH
  • TECH
No Result
View All Result
Bizna Kenya
No Result
View All Result

Home » SAVINGS & INVESTMENT » It’s the Economy, Stupid: Forex Trading and Economic News

It’s the Economy, Stupid: Forex Trading and Economic News

by Tonnie Mello
7th September 2020
in SAVINGS & INVESTMENT
Reading Time: 3min read
A A
forex
Share on FacebookShare on Twitter

Forex trading is a high risk, high reward form of speculation on the global currency markets. Not only are the Forex markets exceptionally volatile, but they are also notoriously unpredictable.

Successful Forex traders are those with a high level of financial education and an extraordinary capacity for risk-related stress. Beginner Forex traders require an iron rod of discipline and the ability to stick to a Forex trading strategy – whether the markets turn against them or go massively in their favor. But one thing that is often overlooked is how intricately linked the Forex market is to geo-political events and global economic news.

The study of global economic news and how it affects Forex trading is part of a subject called fundamental analysis. Fundamental analysis looks at the Forex market through the prism of social, economic, and political events. Some of these events are predictable, like the monthly US employment numbers (the non-farm payroll report or NFP); others are less predictable, like the outcome of the Brexit referendum in the United Kingdom or Trump’s election to the US presidency in 2016.

Radio presenter Jalang’o unveils his new luxury car

Other events, often large news events, can come out of the blue and turn the financial markets upside down in seconds. Notable examples are the 9/11 attacks or the Fukashima nuclear power plant meltdown in Japan. While events like these are completely unpredictable, they have massive economic effects and can turn winning Forex trades into massive losses very quickly.

ReadAlso

Why buying Co-op Bank shares right now is a good investment

Mwananchi Credit Bags Best Logbook Financier Award

Six ridiculous stock market tips you should never follow

How billionaire Aliko Dangote became Africa’s richest person

Most of the time, fundamental analysis is a more sedate affair. Those who trade the fundamentals will pay close attention to changes in economic indicators such as interest rates, employment rates, and inflation.The COVID-19 pandemic has been especially interesting for fundamentalists: Case numbers, deaths, government response – and the economic impact of government response – have all played a part in making the Forex markets incredibly volatile over the last few months.

Fundamentalists have been keeping a particularly close eye on the decisions of the Federal Reserve in the United States. The Federal Reserve is the central bank in the US and operates independently of any political leaders. In recent weeks, the board of governors of the Federal Reserve have made it clear that they are willing to let inflation increase above the usual limit of 2%, some members of the board believe that a looser economic policy will allow them to better tackle the economic fallout of the COVID-19 pandemic.

The consequence of higher inflation in the US would be a weaker US dollar. So, this move has sent the US dollar falling against the other major currencies, as investors and currency speculators look for more profitable markets.  Another reason for the weakening US dollar is uncertainty, investors hate uncertainty. The reason the British Pound collapsed so significantly in 2019 wasn’t that Brexit was on the horizon, it was because no-one knew what form Brexit was going to take, or even if it was going to happen. When economic outlooks are uncertain, investors like to sit on the side-lines rather than risk their money.

With the prospect of rising inflation in the US, there is an air of uncertainty to the economic situation – add the unpredictable outcome of the November election into the mix and investors are being rightfully careful.

All of this is gold-dust to a good fundamentalist Forex trader. Traders who have been buying Euro’s or British Pounds against the US Dollar have been doing very well for themselves. But who knows what is around the corner? COVID-19 has turned the world upside down and will continue to do so for some time. Many good traders have lost out badly by letting their greed get the better of them and throwing their risk management strategies out the window. But now more than ever, disciplined, and careful trading is of the utmost importance.

ShareTweetSendShare

Related Posts

Co-op Bank Stock
SAVINGS & INVESTMENT

Why buying Co-op Bank shares right now is a good investment

by Bizna Reporter
22nd January 2021
Mwananchi Credit Logbook Finance Award
Loans

Mwananchi Credit Bags Best Logbook Financier Award

by Bizna Team
16th December 2020
Stock Market Tips
SAVINGS & INVESTMENT

Six ridiculous stock market tips you should never follow

by Bizna Reporter
16th December 2020
Africa Richest People
SAVINGS & INVESTMENT

How billionaire Aliko Dangote became Africa’s richest person

by Bizna Reporter
6th December 2020
watch out
SAVINGS & INVESTMENT

Risks and Scams Kenyan Investors Should Watch Out for While Trading Forex Online

by Editorial
30th October 2020
bill
SAVINGS & INVESTMENT

Kenya’s new Startup Bill 2020: An Overview for Business Leaders

by Editorial
29th October 2020
Cytonn vs CMA
SAVINGS & INVESTMENT

Alarm as Cytonn fails to pay investors Sh. 123 million dues

by Bizna Reporter
24th September 2020

Discussion about this post

Follow Us

  • 247.4k Fans
  • 350.5k Subscribers

Recommended

I Finally Hit USD 1000 Mark in a Single Month - Bizna Kenya

I Finally Hit USD 1000 Mark in a Single Month

5 days ago
The Farm Gang

Anne Mugo: I invested in a farmer’s rice farm in Mwea and lost big

6 days ago
Strongest currencies in the world

Strongest Currencies In The World (Updated List)

2 days ago
Most Successful Business in Kenya

I quit my bank manager job to help my husband with his business

6 days ago

Sectors

  • AGRIBUSINESS
    • Crops
    • Dairy
    • Livestock
      • Poultry
    • Rabbit
  • AUTO
  • Bizna Club
  • BIZNA SME AWARDS
  • CUSTOMERS VOICE
  • EDUCATION
  • FEATURED
    • TOURISM
  • HEALTH
  • KENYAN MEALS
  • Life Hacks
  • NEWS
    • Corporate
    • World
  • REAL ESTATE
  • SAVINGS & INVESTMENT
    • Insurance
    • Loans
  • SME
    • BIZNA BASICS
    • Digital marketing
      • Online Bizness
    • E-Commerce
    • Management
      • Career
    • Mentorship
    • PROFILES
  • Sponsored
  • TECH
No Result
View All Result

Highlights

After I Found Out My Son And My Second Wife Were In a Relationship, I Could Do Nothing Much

Loon Technology Pilot to be discontinued 

All land, plot owners in Kenya to apply for new title deeds

Simple ways to add value to potatoes for more money

9 most profitable businesses to start with Ksh. 20,000 (Updated)

Why buying Co-op Bank shares right now is a good investment

Trending

Irungu Kang'ata
FEATURED

EACC starts probe on Irungu Kang’ata law business

by Bizna Reporter
24th January 2021

Senate Majority Whip Irungu Kang'ata is in soup. This is after the Ethics and Anti-Corruption Commission (EACC) launched...

stranger

I Had A One Night Stand With A Stranger Since Then I Started Experiencing Chronic Problems, Diseases

24th January 2021
Strongest currencies in the world

Strongest Currencies In The World (Updated List)

23rd January 2021
son

After I Found Out My Son And My Second Wife Were In a Relationship, I Could Do Nothing Much

23rd January 2021
Loon Technology Pilot to be discontinued - Bizna Kenya

Loon Technology Pilot to be discontinued 

22nd January 2021
  • Home
  • About Us
  • Our Profile
  • Privacy Policy
  • Contact Us

2020 Bizna Digital Services | All rights reserved.

No Result
View All Result
  • SME
  • AGRIBUSINESS
  • SAVINGS & INVESTMENT
  • AUTO
  • REAL ESTATE
  • NEWS
  • EDUCATION
  • HEALTH
  • TECH

2020 Bizna Digital Services | All rights reserved.

Welcome Back!

Sign In with Facebook
Sign In with Google
OR

Login to your account below

Forgotten Password?

Create New Account!

Sign Up with Facebook
Sign Up with Google
OR

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In