6 Factors That Affect Price In Binary Options Trading; The most important thing to remember about the factors affecting the price of foreign exchange is what may affect the demand or supply a certain currency in the market. For example, if there was a growing demand for US exports will lead to an increase in value of the dollar compared with other currencies in order to demand for dollars to pay for imports. On the other hand, uncertainty about the economy, traders may push to abandon the US dollar, leading to a decline in the dollar’s value against other currencies. Here are some of the key economic factors that affect the prices of currency and coins on each dealer to be aware.
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Interest rate when interest rates are high in a particular country compared to other countries that will attract traders to invest their money in this country. Which in turn leads to higher exchange rate because there is a great demand for the local currency. In fact, the expectations of traders that the interest rate will increase a country’s influence in the direction of currency exchange rates.
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Trade balance: When the demand for a particular commodity is also on the currency will increase the demand for payment of exports. This leads to an increase in the exchange rate, on the other hand, when imports largest of its exports will drop the exchange rate because there is a huge demand for foreign currencies paid in local currency terms, this Called Trade Of Balance
Public debt: Governments generally funded industrial sector projects by borrowing money, raising the amount of public debt. This may lead to a decline in the value of the currency exchange rates because there is less demand on the local currency in order to keep investors to put their money in countries that suffer from the high value of the debt, for fear of the inability of the state to pay its debts.
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Political developments: Since currency exchange rates reflect a country’s economy, the bad economic news has caused a decline in the value of the exchange rate, while good news leads to a rally. For example, if the announcement that the GDP will grow will lead to increased investment, which creates demand for the local currency, and raise the price exchange.
Inflation: Inflation rate does not reflect the price changes with time, but also reflects the purchasing value of the currency or the amount of goods and services which they can buy them. Inflation is also associated with a rate of interest because the central banks reduce inflation by raising interest rates and thus reduce the amount of currency circulating in the economy.
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