Forex is an exciting market to begin trading. In fact, one of the aspects that make it so attractive is the interest rate announcements by the major central banks of the leading economies. Interest rate announcements are arguably the most important statements that can make or break a currency. Even prior to the publication of an interest rate decision, a countrys currency is likely to move a lot. 4XP actually has a page on their website indicating the main interest rates from the leading global economies.
Interest rates are vital in determining the value of a currency of any particular country. Forex trading is unique, and some comparisons can be made with other markets. For example, with stock trading that is also available at 4XP, the stock will move a lot around the time of an earnings announcement. Therefore, you can understand just how important any type of announcement can be. However, the currency market is very liquid and moves all the time, meaning that even a small announcement can move the currency.
Amongst the most well known central banks are the Bank of England, European Central Bank and US Federal Reserve. There is a continuous news feed that is available from each 4XP trading platform. As a result, no matter what currency you are trading you can follow the latest financial news that will impact that particular currency or currency pair.
Even though interest rate publications dont happen the entire time, the main central banks are always in the limelight. This always results in much scrutiny on the major currency pairs. With the unstable financial markets at the moment you can take control of forex trading with 4XP. As each currency pair goes bullish or bearish you can make profits on the currencies and other assets that 4XP has on offer.
Looking into the future, interest rates will continue to be on the most important determinants of where a currency stands. If you want to start making money from interest rate and currency fluctuations you should deposit with 4XP and see all the benefits that are waiting for you.
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Know your forex terms
Before we delve any deeper into the possibilities that exist in the Forex market, we need to go over some basic Forex market terms.
Pip: A pip (percentage in point) or point, is usually the smallest unit of measurement in the Forex market. Most currency pair quotes are carried out four decimal places—i.e. 1.4500. When you work with Alpari quotes are carried out to the 5th decimal place to provide better pricing. The 5th decimal place represents fractional pips. If the exchange rate of a currency pair moved from 1.45000 to 1.45100, we would say that the price moved up 10 pips. You make money when the pips move your way in a trade.
Note: Any exchange rate that contains the Japanese yen as one of the currencies will only be carried out three decimal places.
Currency Pair: We wouldn’t have a Forex market if we weren’t able to compare the value of one currency against the value of another currency. It is this comparison that drives prices. Forex contracts are always quoted in pairs. The Euro vs. the U.S. dollar (EUR/USD) is the most heavily traded currency pair. The U.S. dollar vs. the Japanese yen (USD/JPY) is another popular pair.
The following is a list of the most common currency pairs, their trading symbols and their nicknames:
Euro vs. U.S. dollar (EUR/USD): “The Euro”
Great Britain Pound vs. U.S. dollar (GBP/USD): “Pound,” “Sterling,” or “The Cable.”
U.S. dollar vs. Swiss franc (USD/CHF): “The Swissie
U.S. dollar vs. Japanese yen (USD/JPY): “The Yen”
U.S. dollar vs. Canadian dollar (USD/CAD): “The CAD,” or “Loonie”
Australian dollar vs. U.S. dollar (AUD/USD): “The Aussie”
New Zealand dollar vs. U.S. dollar (NZD/USD): “The Kiwi”
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