As the forex market is one of the biggest trading markets in the world, global events are intrinsic to its movements. With the value of currency being one of the key factors, global events like the recent Brexit shook the forex market when Britain decided to leave the EU. Here’s how global events can affect the market and what you can do to be aware of them:
Political Events – The Brexit
Political events have a huge impact on the forex market as political decisions are linked closely to currency and the value of a country’s currency. As demonstrated by the recent Brexit influencing the forex market as it led to the value of the sterling plummeting to the lowest in over 30 years. This caused investors to panic, moving their assets into other places in an attempt to lessen the effects. Since the referendum results were announced, the value of the pound has steadily increased once again meaning that trading on the forex market has took off once again. But, the impact of shocks like this make investors think twice about having all of their money in stocks and shares and consider spreading their assets to include other things like precious metals and property.
Wars can seriously impact the forex industry as their impact on a country’s economic stability is huge. If a country is to go to war, the aftermath can be disastrous to their economy and see the value of their currency decrease rapidly. Wars tend to be easier to predict with a build-up of tension between countries before alerting investors to the fact that the market may be affected meaning that keeping up with global current affairs is a good way to plan for this.
By far one of the most unpredictable factors to affect the forex industry, a natural disaster can entirely destroy a country’s economy without warning. Hurricanes, earthquakes and tornados all can cause significant damage to infrastructure leading to a country’s economy suffering and value of currency decreasing massively.
A good way to stay on top of global events in order to be more informed when it comes to trading forex is to keep up with an economic calendar like the ones which FX Pro offer which give accurate information about events across the globe which could have an impact on the forex market, giving you time to plan a strategy for what to do with your investments if the worst should happen.