Forex rates are exchange rates at which currency pairs can be bought and sold in the forex market. The running of forex market is all around the changes of forex rates. If forex rates are fixed just like the period before the collapse of Bretton Woods System, forex market would not have the amazing trading volume . So we can see that forex rates play an unprecedented role in generating trading volume of forex market. What change forex rates in forex market? I will state it as following:
ntentions to trade a certain currency should watch over news released by related central banks.
Foreign trade is a decisive driver of forex rates
Trade balance of a country affects forex rates greatly. Take China for example; if other countries want to buy products from China, they have to exchange their currencies into RMB in order to purchase the products; then there will be a great demand for RMB. If there is foreign trade surplus in China, RMB will appreciate and the forex rates in forex trading are prone to be changed accordingly.
Speculation is a factor in changing forex rates
We all know that forex speculation takes a larger part in forex market. If speculators expect that a currency will appreciate in value, they would buy the currency, which increases the demand of the currency and of course, will affect forex rates in forex trading.
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