Hello. I’ve just started trading (newbie) and I have been following the markets as closely as I can. With everything going on now, I have a question that has been bugging me.
Which one has a larger effect on currencies, economic reports/releases or politics (Brexit/Trump)?
Thanks
That is impossible to say. It depends on so many things. Remember that you are not just trading one currency, but the relative value of a pair of currencies, each with its own factors affecting its value.
Some factors are more significant such as possible interest rate changes and production/employment data and retail sales, etc. And political situations can create a lot of uncertainty over future directions in fiscal, monetary and economic decisions.
Maybe one could say that the biggest impacts generally occur whenever market-sensitive events/releases are unexpected or out of line with current market expectations, whether they are political or economic events.
it’s both. to make it worse it’s the news or reports which aren’t expected or calculated. news is what fx moves, i wished there wasn’t any, because fx would be far more predictable. sometimes it’s policy of the banks or big funds to push it upwards. ach, so many games are played. too bad i’m an outsider, you’re always late for the party.
Economic reports affect fx prices more. The data that comes from the reports makes up most analyst’s and trader’s image of the market and creates the market sentiments that make prices.
Political events may have a larger short term effect, but in the end it is just one event vs. the sum of all economic data.