Reply To: Discuss Forex Day Trading For Beginners

#184774
James Barra
Moderator
    DayTrading.com Team

    Hi Omar_Rahl_4421,

    Thanks for your message.

    Hopefully the below helps answer your question.

    • Inflation – Inflation can devalue a currency because it diminishes purchasing power. Deflation can have the opposite effect. Let’s say the US reports higher than forecasted inflation, the Fed may raise interest rates to tackle it, with higher interest rates enticing foreign investors seeking better returns, which in turn boosts demand for the US Dollar.
    • GDP – Growing Gross Domestic Product (GDP) indicates a robust economy that can result in rising currency values. Let’s say there are reports GDP is growing in the Eurozone, you might see appreciation in the Euro as investors back the region’s economic outlook.
    • Retail sales – Retail sales are a key component of GDP, concerned with consumer spending. Rising retail sales indicate a growing economy which may lead to currency appreciation. Let’s say the UK reports noticeably high retail sales, you may see a stronger GBP.
    • Trade balances – A trade surplus (more exports than imports) often strengthens a currency while the reverse can weaken it. Let’s say India reports high demand for its goods, you may see a stronger INR as international buyers purchase rupees to pay for the exports.