As traders, we rely on forex news today and data to help us make informed trading decisions. Which currencies should you focus on and how long news can affect on market? There are enough questions about this topic.
Let’s have a quick overview of each now.
Who trades forex today?
The forex market is a global marketplace where traders can buy and sell currencies 24/5. There are many different types of players in the market, including individual investors, commercial banks, hedge funds, and central banks. Let’s take a closer look at the influential ones:
- Central banks
Central banks play a very important role in the forex market. They can influence currency rates through their open market operations and interest rate policies, with the goal of stabilizing or improving their nation’s economy. In addition, central banks (and speculators) may intervene in the forex market to change the value of their currency.
- Individual investors
The volume of forex trades made by retail investors is growing rapidly in popularity. Retail investors base currency trades on a combination of fundamentals (interest rate parity, inflation rates, and monetary policy expectations) and technical factors (support, resistance, technical indicators).
- Investment managers
Todays-forex-market-news: An investment manager who has an international portfolio will have to purchase and sell currencies in order to trade foreign securities. Some investment managers may also make speculative forex trades, while some hedge funds execute speculative currency trades as part of their investment strategies.
Which currencies should be focused on?
In the Forex market, there are always opportunities to make trades based on upcoming economic data releases. On any given weekday (except holidays), 7 or more pieces of data are released from 5 major countries. This provides plenty of opportunities for traders who focus on news trading.
Here are they:
- the US dollar
- the Euro
- British pound
- Japanese yen
- Swiss franc
Todays-forex-market-news: Currency can be traded worldwide. You can choose the currencies you want to focus on. But usually, when there are important economic announcements in America, they have a big effect on currency markets because so many trades involve the U.S. dollar.
How long does news affect on market?
According to a study by Martin D. D. Evans and Richard K. Lyons, the market could still be reacting to news releases hours, if not days, after the numbers are released. The study found that the effect on returns generally occurs on the first or second day, but the impact does seem to linger until the fourth day while the Impact of the flow of buy and sell orders is very pronounced even on the third day which can still be observed on the fourth day.
Currencies are always fluctuating due to a number of reasons. It’s important to stay ahead of the game and know what’s going on in the market so that you can make informed decisions. Today, we have focused on giving you an update on who trades forex and which currencies you should be keeping your eye on. Use this information and make your own research in order to be updated about any news in the market.