Important Forex Factors From Forex Professional Carmelo Cerrelli

Here are important Forex Factors from Forex professional Carmelo Cerrelli:

Primary Factors

• Growth - Changes in the country’s Gross Domestic Product or GDP that gives a useful measure of growth. A growing economy tends to strengthen a currency.
• Rates - Short term interest rates affect Forex rates.
• Trade - The country's trade and current account balance can have an impact on Forex rates.
• Economy - The general economic outlook for one country in relation to that of the other country can affect Forex rates.

Economic Factors

• Interest Rates - A key element in evaluating one currency against another. If interest rates are increased, the currency of the country becomes more attractive against other currencies offering lower interest rates.
• Inflation
• Trade or Currency Account Balance - A trade or current account surplus or deficit will either favor the currency rate for the country with a surplus or weaken the rate for the country with a trade deficit.
• Credit - Another economic factor that will influence exchange rates directly. If a country has borrowed excessively large sums of money from other nations or from the IMF, its currency will surely reflect the serious level of debt the country is in.
• Gross Domestic Product (GDP) - Represents the total of goods and services a country produces and reflects the level of growth in the economy.
• Commodity Prices can also affect exchange rates.
• Employment Data - If a country has an increasing percentage of its citizens employed that will tend to strengthen its currency.
• Industrial Production - A strong industrial base will tend to strengthen a nation's currency.
• Retail Sales - A strong retail sales figure is generally favorable for a currency and the country's overall economy.
• Consumer Price Index (CPI) - A measure of inflation.

Other Important Factors

• Supply and Demand Effects - Substantial flows of capital into one currency and out of another currency, can shift the exchange rate for the currency pair to favor whichever currency sees the higher demand.

• Monetary Policy - Because of the effect of monetary policy on interest rates, this makes up an important element in the valuation of a currency.
• Political Influences – It’s widley known that the countries with stable governments tend to have their currencies favored more over those countries with unstable goverments or countries having less favorable political situations.
• Commodity Price - The prices of key commodities like gold and oil tend to affect the valuation of the currencies of their primary exporters and importers.

According to Forex professional Carmelo Cerrelli, it’s imperative to have the knowledge of the above mentioned Forex Factors.