I generally don’t ask questions when it comes to anything I read/see/question online, reason being you can usually google ANYTHING and eventually find either the right answer or a good general consensus that you can put faith in being correct. But I’ve been trying to find a solid answer to this question for a long time and I just can’t find one I’m happy with.
Why does the market move? What determines the exchange rate, because for something that effects EVERYTHING and ANYTHING based internationally I can’t think it’s decided by a portion of the population gambling on it. The general idea seems to be something as simple as; speeches, news, reports, crisis, anything of the like causing a/certain currency/ies to drop/rise accordingly due to buyouts/selloffs.
But this brings up my issue, if there’s always a buyer for every seller then shouldn’t things such as buy/selloffs not contribute to overall pricing? Or does it work like (over simplified) once all buyers (or sellers) have purchased from actual sellers (or buyers) and the market has to start taking orders then price starts to move in that direction?
Maybe I’m overthinking this and maybe it really doesn’t matter at the end of the day but is there an actual force moving the market, does some single entity somewhere determine pricing? Or is it just an algorithm of some sort that matches volumes.
If you can’t tell this is the main thing on my mind recently when it comes to this part of my life (income), so please if you have something to share even if it’s the simplest thing in the world and I’m just totally over-complicating it do so! Also if you do have something to share and you have something to read (book,website, article, anything) to share do so too.
Have a great holiday season.
Edit: After reading this back I don’t know if it’s clear, I mean minute by minute. Is it just a matter of price goes up if at that moment more people are placing buy orders than sell orders and vice versa?
I almost wanted to edit out my edit, I find it very hard to believe this is the case, because if so wouldn’t it work out to be in everyone’s best interest to just go in the same direction as everyone else? At that point the forex market would be able to knock the smaller countries out of existence financially speaking (after all small countries can’t keep up with a multiple trillion dollar a day beast even with their govt’s intervention).