Tuesday, May 23, 2017

Forex : Trading the US Dollar on the Forex :


The US dollar is the forex currency of forex. In other words, it is the currency most traded on the foreign exchange market. Its advance is considerable since the USD dollar is present in nearly 90% of transactions.
How to optimize its dollar trading? That is what we will see today.

The greenback: a historic safe haven
Over the last few decades, the US dollar has gone through many economic and financial crises but never has it sank. If today, the statute of the first economic power of the world of the United States is contested by China, the country remains one of the main engines of the world economy.
In times of recession, crisis or strong risk aversion on the financial markets, traders prefer less risky safe havens. The dollar therefore tends to appreciate.

The US economy strongly influences the US dollar

The growth of the United States is an important driver of the global economy, but it is sensitive to the different economic cycles. In concrete terms, in a recovery or expansion phase, US growth is, in general, among the highest in the developed countries. When the situation is reversed and growth slows down or becomes negative then the repercussions are as immediate as they are powerful.

Role of the Central Bank of the United States

Since the subprime crisis of 2008, the fed has multiplied efforts to revive the American economy. It has lowered key interest rates and used different Quantitative Easing programs.

The evolution of the US dollar is mainly based on its status as a safe haven and the level of growth printed in the country. These two factors are behind most of the fundamentals of pairs including the USD dollar. The shares of the fed will increase the amplitude of upward or downward movements and create volatility in the short term.
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