It is very important to stay afloat in the Forex despite the latest news finance that you read. Instead of worrying, use the news to your advantage to increase your profit. Putting together the world news will give you a clearer view and analysis on how things are likely to unfold in the future hence, giving you an advantage when it comes to Forex.
How to “Read” Financial News
Finance-related news reports are everywhere and you might think that reading it is an easy task. However, this is not a simple matter or really reading the articles. This is more on how you will understand, analyze, and make objective predictions based on those. Take increasing recession fear in the US. It was reported by Heather Long at CNN Money that the country may not be in recession, but the increasing statistics of its likelihood is giving a scare to the people. It could mean a dollar drop, but this is not automatically negative as you could exchange it for a higher rate in other parts of the world.
Relate Your Analysis to News in Other Parts of the World
The housing slump experienced by the US a few years back is definitely negative on the economy. Take a more recent case and look again at the increasing fear about recession. According to Janet Yellen, Federal Reserve Chair, a recession is not likely to take place as US is experiencing the best job growth that ever happened since 1999. The fear of the investors though cannot be eased right away with words such as this. Look at the economy of other countries and you will know that the situation is not much different. Europe and Asia are also not doing well with their current political situations.
Look Out for News that Might Affect the Currencies of the World
Filter business finance news articles so that you will be left with something that could make an influence at the world-wide scope. Below are examples that happened in the past.
- Crisis in the mortgage-back securities cause the Forex traders to be vigilant in watching what will happen in future mortgages.
- Britain’s pound gained 200 points plus thanks to retail traders.
- Continued fear about the recession in the US that might happen. This will drive the dollar to drop lower, but you can use this to your advantage as some analysts claim that US economy is likely to be on the rise again soon.
Never Undermine the Influence of Politics in the Economy
Forex trade does not concern itself with currencies and financial news alone. Unlike what most people think, the politics of a country plays an important part in the said trade. A keen investor must take note of all the major political news that may influence the world. The economy may serve as the foundation of other social structures in a society, but do not forget that this is also influenced by politics and culture. The political situation in fact plays a big role because it can dictate or at least greatly affect on where the economy of country is going.
Current Example of a Political Event That May Impact the World Economy
Use the current situation of European Union (EU) as an example. The union’s problem will not end in the exit of Britain from the block. Rather, the Brexit is possible to give rise to other tougher problems that the EU might face. In dealing with political news, it is also important to know the history of the involved like the long-standing division between the northern and southern Europe. In other words, keeping track of the political news will help you in the analysis of the situation and give you an idea on what is going to happen in the near future.
Other News That Will Have an Impact on the Currencies
Natural disasters, especially those on a large scale, are sure to affect greatly the economy of a country and its currency. Sudden tragic events like assassination of a well-known political figure should also be considered.
Search for News Analysis Courtesy of Forex News Services
Do not make your life hard and consult the analysis made by popular Forex reseraches like the following:
- Mellon Foreign Exchange
- Daily FX
- BHF Bank
- Mizuho Corporate Bank
- Daily Scotia FX
- Rabobank Technical FX Daily
- CIBC World Markets
Forex trading may be about currencies but you need more than that to be able to succeed in this field. Take into account all that is happening in finance in the news around the globe but also on the lookout for political news.