Influence the short-term fluctuations of the foreign exchange market political factors

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Compared with the stock cashback forex bond Whatisforexrebates, the bestforexrebate What is forex rebate market is much more affected by political factors When a major forexrebatenetworkternational event occurs, the foreign exchange market will regularly rise and fall more than the stock market and bond market changes The main reason is that foreign exchange as an international flow of assets, in the turbulent political pattern of the risks faced by other assets will be larger; and The foreign exchange market is fast-moving and further makes the foreign exchange market more volatile when the political situation is turbulent The political risks in the foreign exchange market are mainly political instability causing economic policy changes, nationalization measures, etc. From the specific form, there are elections, wars, coups, border conflicts, etc. From the perspective of capital security, as the United States is the worlds largest military power today, its economy is also still in the lead, so After the general political turmoil, the U.S. dollar will play a "safehaven" (safehaven) role, will immediately strengthen political events are often sudden events, unexpected foreign exchange market, which makes the spot price of the foreign exchange market is unusually violent fluctuations, its volatility greatly exceeds the long-term fluctuations in foreign exchange prices The following selection of the Soviet Union 8.19 event, the United Kingdom in the 1992 elections and the United States attack on Iraq "Desert Storm" plan as an example to illustrate the political events on the foreign exchange market short-term trend of some of the laws 1, the Soviet Union in 1991 8.19 event on the foreign exchange market from the second half of 1991, the dollar on almost However, the Soviet Union 8.19 event to make this trend completely disrupted, and the failure of the event, and the trend back to the original state, the dollar and weak all the way to the second year in January to stop the decline back up The foreign exchange market in the Soviet Union 8.19 event before and after the fluctuations completely explained the dollar as a "safe haven" currency Role in the 8.19 event before the foreign exchange market has been circulating the news of the Soviet Unions political instability, the dollar for seven consecutive days up, but who did not anticipate that there would be unexpected events to August 19, when all traders in the foreign exchange market on the computer screen typed the words "coup détat in the Soviet Union", there was an immediate panic To buy the dollar wind to the pound, for example, the pound to the dollar exchange rate in just a few minutes from 1 pound to 1.6633 U.S. dollars fell sharply to 1.6130, down 3.1% the next day, the foreign exchange market and with the loss of contact with Yilbachev, the launch of the event seems to be difficult to control the situation and other news up and down to the third day, 8.19 events declared failure, the foreign exchange market immediately dumped the dollar Also to the pound for example, the pound to the dollar exchange rate from 1.6363 U.S. dollars to 1.6915, a jump of 3.4%, so that the pound and together with other foreign exchange, began to the dollar exchange rate upward trend Soviet 8.19 events during the foreign exchange market movements show that the movement of foreign exchange prices have their own intrinsic laws short-term sudden events can cause the spot price of foreign exchange significantly deviated from its long-term However, after the event, the foreign exchange trend in accordance with the direction of its long-term equilibrium price movement in general, short-term price changes will at most correct the direction of the long-term foreign exchange equilibrium price, but it is difficult to change or completely reverse its long-term fluctuation trend As for the political emergencies, the foreign exchange market fluctuations in the limit of the magnitude of how big, is always a controversial issue in general, in the emergencies This explanation is not very convincing in practice, but technical analysts believe that the exchange rate of foreign exchange against the U.S. dollar in the event of a sudden event can fall how much, there is a law to the Soviet Union 8.19 event, for example, the reason why the exchange rate of the pound against the dollar fell to 1.6130 when Stopped rising, entirely because this point is the bottom of the moving average of the pound to dollar exchange rate in the past five years, the pound to dollar exchange rate is unlikely to cross this line, later the Soviet Union 8.19 event failed, more about the support role of this point 2, April 1992 British election on the foreign exchange market in the United Kingdom before the election more than a month, the foreign exchange market began to be affected by the election in Before the election, the Conservative Party candidate that the current Prime Minister Mei Jie in the polls has been behind the Labour Party candidate Neil Kinnock British Labour Party in power before the 80s had insisted on the implementation of nationalization policy, resulting in capital outflow situation Conservative Party Margaret Thatcher in 1979 when the Prime Minister took office, spent nearly 10 years to implement the privatization policy, and Mei Jie also continued to implement this policy after taking office therefore Although Kinnock, a worker, is a conservative in the Labour Party, there are fears that the UK could return to the days of nationalization as Kinnock was ahead of Major in the polls. The exchange rate of the British pound against the mark, for example, the exchange rate of the pound began to fall from mid-February, from the end of February to 2.96 marks per pound to 2.83 on April 6. The pound is a member currency of the European Monetary System, its exchange rate against the mark is determined by a fixed but adjustable exchange rate system, the upper limit at 3.1320 marks, the lower limit at 2.7780 marks, the central exchange rate of 2.95 but since Since the British pound joined the European Monetary System in 1990, the foreign exchange market has always believed that the exchange rate of the pound is overvalued, so often in the pound when the pound is strong to sell the pound in the British election came, Major in the polls behind, naturally, the foreign exchange market that the British policy outlook is unstable, further inciting the market to sell the pound wind, so that the exchange rate of the pound to the mark to the European Monetary System bottom limit approaching the day of the election The day of the election, the British pound in the foreign exchange market appeared violent fluctuations from the exchange rate of the pound to the mark, the volatility of 2%, 600 points, that is, 6 pfennigs, and the entire day of fluctuations is very dramatic in the two days before the election, the foreign exchange market due to hear Meijer in the polls has been close to the rumors of Kinnock, has begun to buy the pound to throw the mark and other foreign exchange in the election day, Kinnocks votes and poll results in At the beginning still ahead of Mei Jie, so that the foreign exchange market and a substantial throw pounds but not long after, Mei Jies votes began to rise, immediately in the foreign exchange market to throw foreign exchange to buy pounds whirlwind, so that the exchange rate of the pound to the mark quickly climbed, from 2.8477 marks soared to 2.9053 after the election, the pound seems to have reversed the weakness, became a strong currency foreign exchange market always talk about British economic prospects, the flow of overseas capital will return to the United Kingdom, Meijers victory indicates the stability of the British political situation, etc. In fact, this time Meijer is still the original Prime Minister Meijer, and the subsequent period of time often appear in the British economic downturn statistics, but the pound in the next nearly two months or all the way up many forecasters and technical analysts have predicted that the exchange rate of the pound against the mark will rise to 3.10, to test the upper limit of 3.13 set by the European Monetary System From a graphical point of view, the exchange rate of the pound against the mark has been high after the election, but each time the high was bounced back at 2.9500, after nearly two months of high hovering, the exchange rate of the pound against the mark finally began to fall in June The movement of the pound before and after the British election suggests that excessive volatility in foreign exchange prices in the short term may Due to the support of market expectations and maintain a longer period in this expectation is broken before, the market will sometimes consider the short-term equilibrium price is a reasonable price, while the forecast long-term equilibrium price is instead considered to be biased However, if the foreign exchange market expectations are never confirmed, due to unexpected events and distorted foreign exchange price trend will return to the original trend, or even go farther from June Beginning, the pound to the mark exchange rate all the way down in the foreign exchange market to confirm the British economic outlook is not very optimistic, the weakness of the pound has become the trend to the European monetary system in September after the crisis, the pound to the mark exchange rate plummeted, as if in free fall, forcing the United Kingdom to withdraw from the European monetary system, the pound to the mark exchange rate fell to 2.40 marks in October 3, the U.S. attack on Iraq The impact of the "Desert Storm" plan to liberate Kuwait on the foreign exchange market "Desert Storm" plan is also typical of the dollar and gold as a "safe haven" role of capital world The volatility of the situation will make the U.S. dollar and gold soar, the former people say "a cannon, gold million" should be this meaning Many investors in the foreign exchange market believe that the movement of foreign exchange prices have their own certain laws but in the "Desert Storm" plan Before and after the "Desert Storm" plan, the foreign exchange market price movement up and down, seems very messy U.S. attack on Iraq is January 17, 1991, in the month before this, the foreign exchange market around the U.S. will not fight the speculation, ups and downs, clearly illustrates the above characteristics whenever the U.S. government officials to make a strong attitude speech, said to take military action, the dollar will be a wave in a day; and The foreign exchange market heard rumors of Western European countries to mediate, as if a peaceful solution can be achieved, the dollar will fall once in January 17, the day the war broke out, the dollar was also a surge at first from Figure 4-4 pound against the dollar, the pound fell to 1.8990 but not long after, the press that the United States has quickly control of the situation, a sure victory, the dollar In fact, according to the analysis of the military power of the U.S. and Iraq, as well as the tendency of international public opinion, any rational conclusion would be that the U.S. would achieve the military objective of driving Iraq out of Kuwait. However, the foreign exchange market does not accept this logical judgment, but according to peoples first generated psychology and expectations to find the price only after the fact is accepted, the market price will jerk back to the original trend to go to the dollar price of gold can better illustrate this point, in the United States to Iraq after the attack, the price of gold surprisingly rose to $ 410 an ounce, but in the U.S. military to take After the news of the absolute advantage, gold and plunged to $ 373.70, during the decline of up to 9.7%, greatly unexpected, many small investors in the market all at once "set" in it, and because of gold and then continue to fall, so that this part of the investors losses are very heavy from any kind of major Foreign exchange to the U.S. dollar exchange rate trends 10-year chart, people can find the 10 years of international political and economic landscape changes due to each unexpected event, each important economic statistics will cause dramatic fluctuations in the foreign exchange market every day, so that the history of exchange rates become a microcosm of the history of international political and economic development this conclusion is more convincing in the foreign exchange market investment, in the grasp of foreign exchange trends Long-term trends, but also to pay close attention to its short-term fluctuations, only to recognize its short-term fluctuations in the law, in order to be invincible in the foreign exchange market

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