What Influence Exchange Rates?
Which one of these does NOT drive exchange rates?
All of these drive exchange rates
Who controls interest rates?
Both A & B. There are 8 most influential Central Banks from The Bank of Canada, Bank of England, European Central Bank, to the Bank of New Zealand
When Inflation is a good thing?
Shorting a currency – If you are a Forex trader who has gone short on EURUSD ( hoping that the euro will lose its value) and the Eurozone is hit by a big inflation, you will have a winning position (if the U.S. will not experience the same), as the value of dollar will rise against the euro.
Is it smart to keep your eye on an Economic Calendar?
Yes – Remember that markets often move in anticipation of indicators, even before the data is revealed.
Will elections possibly move markets?
Yes – Elections usually create uncertainty about the future of a country. When the leaders of a country change, it often comes with a different approach to fiscal (taxes and government spending) and monetary (interest rates, bank reserve settings) policy, both of which have direct impact on currency rates.
If the annual increase in GDP is at a 3% - 3.5%, it indicates a healthy economy.
When Inflation is a bad thing?
Both A & B
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