How other Markets affect FX

I have been reading alot recently the articles on Bloomberg and CNBC in a bid to get a better understanding of what really drives the Currency markets.

I keep reading about Oil, Gold and the Dow....

My question is how do the abover markets affect a pair like say the EURUSD or FX in general for that fact.

Why do they affect the currencies and in what way i.e. Does the USD weaken with Oil strength etc...

Could someone enlighten me as to what effects these markets have on the FX

Any one have any ideas...

Ricardo,

Oil strength is reflected on the Cad because Canada has the largest oil sands apart from the opec countries, and Gold in reflected in Aussie.Usually when the USD is weak oil and gold appreciate because investors look to put their money in commodities, so IF/When the dollar will gain some ground you will see oil and gold pull back

Carry trades goes in line with the DOW , when dow sells off ,carry's selloff as risky aversion comes into play and investors pay back loans in low interest countries.

you have alot of info on babypips.com if you want to go into details

Hope it helps

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Just look on their home page( don't worry, it's free)