Q: The whole world seems to be focused on interest rates, the price of oil and gas, changes in the weather, etc. Do any of these
A: You better bet they do!
For the major currencies
– those belonging to the primary industrialized countries – interest rates
are often at the top of the list of influences on forex prices. Capital
seeks the best return, so the relative levels of interest rates between
currencies influences capital movement, which creates supply and demand.
At the same time, keep in
mind that the forex market helps facilitate trade. Anything that is bought
and sold around the world – like oil and gas – requires currency
transactions on some level. That’s more supply and demand considerations at
work.