When it comes to online currency trading, or forex, there are a multiple of factors which can affect the value of any given currency, no matter how stable. Whether it be interest rates, unemployment, gross domestic product, political upheaval, price indexes, stock prices or any number of other contributing factors. There is a good reason why many forex brokers use automated platforms to determine value and correct moves within the world of forex trading. To try and keep up with all the variables which alter currency could be mind-numbing, even impossible.
Factors
Everybody's favorite subject, interest rates. This multi-headed beast is a huge factor in determining the value of any country's currency. Interest rate sectors include: the prime rate, the bond yield, the discount rate(when financial institutions borrow from the Federal Reserve through its Discount Window program)the yield curve, Sterling Overnight Index Average(the Pound) and many other smaller indicators, some unique to certain countries. Still, it's obvious that the movement of interest rates is an area where forex brokers watch very carefully.
The Gross Domestic Product is the overall value of goods and services produced within a country for a certain period of time. The areas the experts keep an eye on are, the debt to the Gross National Product and the quarterly changes of the GDP.
The employment and business activity of a country are also critical factors. The employment statistics include; average hourly earnings, average weekly earnings, labor force, unemployment rate, unemployment claims. The business activity stats include: retail sales, home sales(existing and new)industrial production, house price index, refinery capacity, the purchasing manager index.
Even More
Again, the number of factors are many and each factor has sub-groups with even more critical data. And yet, even if all your bases are covered in regards to "hard data", something out of your control, like a natural catastrophe, or epidemic, or political upheaval could play havoc with currency trading.
