World events have a profound effect on Forex markets. What seem to be minor events can cause currencies to rise and fall. Forex traders must stay well informed about events in several categories. Obviously the main categories would be political events and financial events and trends. News is now global and individuals have access to news sources that were nonexistent a decade ago. Many websites specialize in world financial news and the venerable Wall Street Journal is now online. Many novice Forex traders mistakenly believe that only economic news has an effect on Forex markets. Nothing could be further from the truth. Using the United States as an example many investors are uncertain of the direction the United States will take and at the present time the election of 2008 is too close to call. Recently U.S. Democratic presidential candidate Barack Obama said on Monday the crisis sweeping Lehman Brothers and other Wall Street firms posed a major threat to the U.S. economy and underscored the need to modernize the financial system. Mr. McCain, on the other hand has claimed that the US economy is "fundamentally strong" Backtracking Mr. McCain said that he did not mean that the American economy was strong but, "I was talking about the fundamentals of America, which is the workers, their productivity, their innovation, their incredible performance for many, many years". The US presidential has traditionally had an effect on Forex markets and investors would be wise to follow US political events especially since the US dollar is the dominant currency in Forex markets. No matter who wins the US presidential election the perception of the new president and his policies will have a major effect in currency markets. Economic events obviously have a major effect on Forex markets. Since currencies are traded in pairs following events in both countries would be prudent. Economic events that can affect Forex markets include, GDP, retail sales, industrial production, changes in interest rates, mortgage markets, factory orders, trade balances, farm reports, balance of trade, national debt, and other factors too numerous to list. Fortunately there are online news services that specialize in political and financial news. Investors may sign up for very specific alerts dealing with the minutest aspect of world economies and how they are expected to affect Forex markets. For those who wish to have control of their Forex trades following world events is essential for making informed decisions. Forex trading requires research, education, discipline, patience, and occasionally nerves of steel.
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