Trading CFDs carries considerable risk of capital loss. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
December 18, 2017
Among the most relevant macroeconomic data for forex traders, inflation must absolutely be included, or even better all the data on production price trends (PPI) and consumption (CPI).
Very often, these data are not responsible for the strong immediate volatility for the most directly affected exchange rates (unemployment is definitely more impactful in the short term), but they are a key factor in the monetary policy choices of central banks and consequently on the performance of a currency in a medium term perspective.
In the western world, inflation seems to have disappeared with central banks setting targets that are hard to reach and trying to fight deflation, which is falling prices for consumers.
The situation is different in emerging countries, where the control of inflation is fundamental to avoid social and economic crises, as the personal income of citizens is still quite low.
The consumer price index measures the price change of a basket of goods purchased on average by consumers.
The producer price index measures the change in the price of raw and semi-finished materials necessary for the production of the finished product.
An excessive variation of production prices is usually transmitted with an increase in consumer prices, an increase that takes the purchasing power of the consumer away causing a contraction of consumptions due to a lower amount of money in his possession.
This is why central banks are always very attentive to inflation and the forex market is interested in monetary policy choices.
A central bank that sets inflation targets will do everything to prevent these levels being exceeded. But if this happens, it is very likely that the first measure adopted by a central bank fighting inflation will be a rise in interest rates.
Forex traders know very well that this kind of decision positively impacts the currency of the country in which the rates have been raised. The reason for this is obviously to be found in the higher return offered by the investment tools of the reference currency.
The increase in rates and the simultaneous strengthening of the currency should slow down consumption with less pressure on prices that should go down again over the months.
The same currency fluctuations may be responsible for a change in the inflation rate.
If a currency weakens strongly, the country exports will grow due to the greater competitiveness of goods and services, but imported products will definitely cost more, increasing internal inflation. At that point, a central bank must cut interest rates by making investments in the reference currency cheaper and weaker.
Obviously, expectations always dominate the exchanges and the so-called “buy rumour sell news” proves to be correct in a liquid market open 24 hours a day as the forex is.
May 15, 2018
The volatility of the forex world is one of those factors that attract a huge number of beginner and professional traders.
April 13, 2018
What really drives the forex market? This is a question that is difficult to answer especially due to the complexity of the forex market and all the variables that influence the quotations of a currency.
April 02, 2018
At the beginning of April, we can expect a rise in rates of the Fed, in a very uncertain market moment, especially on the stock market.
March 01, 2018
A list of important events that can move the markets in March...
February 18, 2018
For those trading on forex it is essential to understand all the signals that the market offers daily. Technical analysis tools help the trader understand who is dominating the market: bulls or bears.
February 05, 2018
There are no appointments in the month of February with the two most important central banks in the world, ECB and FED.
January 20, 2018
Good traders always use a stoploss when they open a new trade. You can use a regular stop, but you can also use a trailing stop.
January 02, 2018
Last year closed with important performances that were not seen for a while, especially concerning Euro and Dollar.
December 01, 2017
December is crucial for the currency market, but not just because of the important meeting of the Federal Reserve scheduled for the 13th.
November 21, 2017
Forex trading can create significant error margins and for this reason the combination of money management, continuous training and common sense is crucial to get the success you want.
November 02, 2017
November starts with the Federal Reserve meeting that should lead to the rise of rates in the month of December.
October 21, 2017
The Forex market allows each trader to operate not only on major currencies like EurUsd, UsdJpy or GbpUsd (the so-called majors), but also on the so-called exotic cross currencies.
October 04, 2017
The month of October is dense with appointments, especially with reference to the news that might come from Central Banks.
June 30, 2017
As always, the month of July represents the antechamber to the month of August, a usually volatile month for financial markets due to the low amount of trades and lower presence of institutional transactions.
May 21, 2016
What are the benefits of trading CFDs over traditional forms of trading?