What determines the currency prices on forex?
Currency prices on the forex market fluctuate for a variety of reasons. These tend to be a mixture of economic and political conditions such as, interest rates, inflation and political stability. To influence the value of their currency, governments may even participate in the forex market to attempt raise or lower the price (by buying; in order to raise it, or by flooding the market with their currency; in order to lower it). All or any one of these factors may affect forex currency prices, but because of the size of the market, it would be impossible for a single entity to ‘sway’ it for any length of time. Unlike stocks, currency prices in the forex market tend to create trends, with fluctuations generally repeating themselves in relatively predictable cycles.
