Learning
Forex: When it comes the decision whether you should buy or sell
dollars then it all comes down to the economic activity that occurs. Why? Due to strong economies around the world will attract investment. The safety factor of funds and the ability of the return on investment will be the choice of the investor.On
the other hand, the American consumption to the needs of imports of
goods and services from other countries has caused dollars flowing out
of the country. Although the US to be the engine for the world economy, today the US has become the largest debtor nation for consumption.The US was able to attract foreign capital to offset the trade deficit
(if imports greater than exports, the current account deficit).
Factors Affecting the Dollar Value
The bottom line is that when it will take a position in the dollar, a forex trader actually needs to know the various factors that affect the value of the dollar.This methodology can be divided into the following three factors:
1. Factors of supply and demand
2. Factor market sentiment and psychology
3. Technical factors
Supply Versus Demand Dollar
When we did the export of products or services, then the activity will create demand for the dollar as exporters require payment for goods and services in the form of dollars must be converted from local currency into the form of dollars. Therefore, exporters will sell the currency and buy dollars so that they can make payments.Another example when the US government or large American exporters to issue bonds to raise capital then when bonds are purchased by foreigners, once again the payment will be made in the form of dollars.Likewise, if the economic growth in the US will bring foreigners to own shares of US companies so once again the stock investors will sell the local currency to buy dollars to pay for the purchase of shares.
Factors Affecting the Dollar Value
The bottom line is that when it will take a position in the dollar, a forex trader actually needs to know the various factors that affect the value of the dollar.This methodology can be divided into the following three factors:
1. Factors of supply and demand
2. Factor market sentiment and psychology
3. Technical factors
Supply Versus Demand Dollar
When we did the export of products or services, then the activity will create demand for the dollar as exporters require payment for goods and services in the form of dollars must be converted from local currency into the form of dollars. Therefore, exporters will sell the currency and buy dollars so that they can make payments.Another example when the US government or large American exporters to issue bonds to raise capital then when bonds are purchased by foreigners, once again the payment will be made in the form of dollars.Likewise, if the economic growth in the US will bring foreigners to own shares of US companies so once again the stock investors will sell the local currency to buy dollars to pay for the purchase of shares.
Market sentiment and Psychology
Also note that if the US economy weakens, slowing consumption and rising unemployment? and then the US is faced with the possibility that foreigners will sell bonds or stocks where investors back wanted cash from the sale of stocks and bonds. This activity will make dollar sale and purchase in local currency investors.
Technical and Fundamental Factors
As a trader, we have to measure whether the supply of dollars will be greater or smaller related dollar demand. To help determine this, we need to pay attention to the news and economic events released by the government such as salary data, GDP data and information economy measurement that can help us to determine what is happening in the economy and predict whether the economy is strengthened or weakenedIn addition, we need to determine public sentiment about what the market is thinking. To add to the mix of the estimates, historical patterns generated on the support and resistance levels, technical indicators, and so on will be important.Many traders believe that these patterns will be repeated and can therefore be used to predict future movements.
Recession in 2007
Economic conditions during the recession that started in 2007 has forced the US government to play a role that is unprecedented in the economy. Because economic growth receded as a result of large deleveraging of financial assets that occurred.The US government should adopt policies to increase government spending and keep the economy running. The purpose of their spending is to create jobs so that consumers can get the money and increasing consumption and boosting the growth needed to support economic growth.The government took this position at the expense of the deficit and the national debt will increase. This increase in costs by essentially printing money and by selling government bonds to foreign governments and investors, resulting in increased supply of dollars. Therefore as a result the dollar depreciates.
Conclusion
By supervising Dollar Index chart will give you an idea of how the price of the dollar against other currencies. By looking at the chart patterns and listening as well as watching the market sentiment in the major fundamental factors affecting supply and demand trader can develop a big picture of the flow of dollars.
Also note that if the US economy weakens, slowing consumption and rising unemployment? and then the US is faced with the possibility that foreigners will sell bonds or stocks where investors back wanted cash from the sale of stocks and bonds. This activity will make dollar sale and purchase in local currency investors.
Technical and Fundamental Factors
As a trader, we have to measure whether the supply of dollars will be greater or smaller related dollar demand. To help determine this, we need to pay attention to the news and economic events released by the government such as salary data, GDP data and information economy measurement that can help us to determine what is happening in the economy and predict whether the economy is strengthened or weakenedIn addition, we need to determine public sentiment about what the market is thinking. To add to the mix of the estimates, historical patterns generated on the support and resistance levels, technical indicators, and so on will be important.Many traders believe that these patterns will be repeated and can therefore be used to predict future movements.
Recession in 2007
Economic conditions during the recession that started in 2007 has forced the US government to play a role that is unprecedented in the economy. Because economic growth receded as a result of large deleveraging of financial assets that occurred.The US government should adopt policies to increase government spending and keep the economy running. The purpose of their spending is to create jobs so that consumers can get the money and increasing consumption and boosting the growth needed to support economic growth.The government took this position at the expense of the deficit and the national debt will increase. This increase in costs by essentially printing money and by selling government bonds to foreign governments and investors, resulting in increased supply of dollars. Therefore as a result the dollar depreciates.
Conclusion
By supervising Dollar Index chart will give you an idea of how the price of the dollar against other currencies. By looking at the chart patterns and listening as well as watching the market sentiment in the major fundamental factors affecting supply and demand trader can develop a big picture of the flow of dollars.
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