If you don't have any idea, you need to start with the big picture ... like what a country exports.
Australia exports energy {coal, etc} and China buys that ... soo Aussie is a 'commodity country', if the Chinese economy shrinks, that means a lower demand for energy, so less exports from Australia to China, which in turn makes Aussie less money which would lower the value of their worth / currency ... theoretically speaking of course ..
This is a question that you just have to put time into research and paying attention to the markets.
If you don't have any idea, you need to start with the big picture ... like what a country exports.
Australia exports energy {coal, etc} and China buys that ... soo Aussie is a 'commodity country', if the Chinese economy shrinks, that means a lower demand for energy, so less exports from Australia to China, which in turn makes Aussie less money which would lower the value of their worth / currency ... theoretically speaking of course ..
This is a question that you just have to put time into research and paying...
Ignored
Thanks for your expalnations, I found out that sometime GBPUSD follows EURUSD direction, but sometime EURUSD follows GBPUSD direction....
I believe USD, JPY and CHF are called "safe haven" currencies, which means anytime something happens that is hurting the world's economy overall (e.g. natural disasters, terrorist attacks, uprisings, riots), they rise because investors are trying to look for safe currencies.
This is why the Japanese Yen got so strong despite the earthquake (it rose so much their central bank had to intervene).
I also think that the Dollar is losing it's safe haven value as the US economy is so bad nowadays (e.g. huge national debt, high unemployment rate, housing problems).
I believe USD, JPY and CHF are called "safe haven" currencies, which means anytime something happens that is hurting the world's economy overall (e.g. natural disasters, terrorist attacks, uprisings, riots), they rise because investors are trying to look for safe currencies.
This is why the Japanese Yen got so strong despite the earthquake (it rose so much their central bank had to intervene).
I also think that the Dollar is losing it's safe haven value as the US economy is so bad nowadays (e.g. huge national debt, high unemployment rate,...
Hello, anyone could explain how EUR and GBP correlated; as well as USD and JPY?
EUR follows GBP or GBP follows EUR?
USD follows JPY or JPY follows USD?
Ignored
EUR and GBP are correlated due to the geographic location.
the Dollar and the Yen being considered the "safe haven currencies" along with CHF, but different things can be moving them, which all boils down to money flowing in or out for whatever reason, not just fx speculation. Depends on what the market is focused on. I like to try and find what's causing the movements. There is different things going on at the same time, so it's common to see divergence
monetary policy, geopolitical events, other markets, etc.
Hello, anyone could explain how EUR and GBP correlated; as well as USD and JPY?
EUR follows GBP or GBP follows EUR?
USD follows JPY or JPY follows USD?
Ignored
If talk about EURUSD AND GBPUSD I would say there is tight correlation between them. Strong movements on one currency pair will be confirmed on the other.
In long term they move to the same direction. But in short term they can more in different.
e.g. if my rules are not to risk more than 2% on one trade, i shouldn't place a buy order on EUR/USD and GBP/USD at the same time (risking 2% on each), because due to the high correlation, i'm risking more
also if my system indicates a buy signal on EUR/USD and a short signal on GBP/USD, i won't place both orders, because of the high positive correlation (of course this is irrevelant for very short-term trades, e.g. scalping)
This is why the Japanese Yen got so strong despite the earthquake (it rose so much their central bank had to intervene).
...
Ignored
JPY rose post-quake because of repatriation. All of a sudden there were a lot of insurance companies on the hook for a lot of policies. These insurance companies had funds held in foreign (dollar) denominate assets that needed to be rapidly transformed into yen for payouts. The process of this transferral caused the rise in the yen and market conditions exacerbated it.
