The European Union (EU) is a brotherhood of 27 member states which started from a tiny gang of six neighboring states in 1951. By the magical powers of the Treaty of Maastricht, it then grew into a large economic and political bloc, making it the largest economic region in the world. Talk about playing a huge role in… Continue reading Eurozone
Month: October 2022
United States of America
The United States of America is comprised of 50 states and a federal district. The majority of the country can be found in North America, but the United States also has some territories in the Pacific. Since its independence from the U.K. on the Fourth of July back in 1776, the U.S. has become an… Continue reading United States of America
Forex Trader’s Guide to Major Economies
Today we’re going to take a trip around the world, but it ain’t gonna take 80 days. If you’re fast enough to keep up, we can probably get around in just 80 seconds! …Not! In any case, we’ll make sure you learn about the nitty-gritty of each major economy and what makes its engine go.… Continue reading Forex Trader’s Guide to Major Economies
Intermarket Analysis Cheat Sheet
Intermarket analysis studies the relationships between asset classes, typically currencies, bonds, commodities, and stocks. It can help traders generate broader trading ideas, reveal potential market turning points, or confirm other analysis methods. The price action of currencies is often driven by their relationship with commodities, bonds, and stock indices. For example, here are some traditional intermarket relationships:… Continue reading Intermarket Analysis Cheat Sheet
How to Use EUR/JPY as a Leading Indicator for Stocks
As we said earlier, in order for someone to invest in a particular stock market, one would need the local currency in order to purchase stocks. You can imagine the effect that stock markets like the DAX (that’s the German stock market), have on currencies. In theory, whenever the DAX rises, we can probably expect… Continue reading How to Use EUR/JPY as a Leading Indicator for Stocks
How the Stock Market Affects the Forex Market
Let’s see how the forex market can affect the stock market, specifically stock indexes. When people talk about the stock market, you generally hear them using a stock market index in reference to the market’s performance. A stock market index is simply a curated basket of certain stocks. This list of stocks is a way to get a… Continue reading How the Stock Market Affects the Forex Market
Relationship Between Stocks and Forex
One issue with using global equity markets to make forex trading decisions is figuring out which leads which. It’s like answering that age-old question, “Which came first, the chicken or the egg?” or “Who’s yo daddy?!” Are the equity markets calling the shots? Or is it the forex market that wears the pants in the relationship? The… Continue reading Relationship Between Stocks and Forex
Forex and Global Equity Markets
Did you know that equity markets can also be used to help gauge currency movement? In a way, you can use the equity indices as some kind of a forex crystal ball. Based on what you see on the television, what you hear on the radio, and what you read in the newspaper, it seems that the… Continue reading Forex and Global Equity Markets
How Fixed Income Securities Affect Currency Movements
A quick recap: So far, we’ve discussed how differences in rates of return can serve as an indicator of currency price movement. As the bond spread or interest rate differential between two economies increases, the currency with the higher bond yield or interest rate generally appreciates against the other. Fixed income securities (including bonds) are investments… Continue reading How Fixed Income Securities Affect Currency Movements
How Bond Spreads Between Two Countries Affect Their Exchange Rate
The bond spread represents the difference between two countries’ bond yields. These differences give rise to carry trade, which we discussed in a previous lesson. By monitoring bond spreads and expectations for interest rate changes, you will have an idea of where currency pairs are headed. Here’s what we mean: As the bond spread between two economies widens, the currency… Continue reading How Bond Spreads Between Two Countries Affect Their Exchange Rate