Political events can be major market movers in forex trading. Changes in government, new legislation, and international politics can have a huge effect on currency prices. Political uncertainty and instability can cause investors to move money out of countries, leading to currency devaluation. Unexpected events such as elections, referendums, or coups can cause significant fluctuations in currency prices.
Natural disasters such as earthquakes, floods, or hurricanes can also be major market movers. These events can disrupt supply chains, production levels, and agriculture, leading to shifts in currency prices.
Sentiment can be a major factor in forex trading. If investors become pessimistic about a currency, it can lead to a sell-off of that currency and a decrease in its value. Similarly, if investors become optimistic, it can lead to an increase in value.
Monetary policy is another major factor in forex trading. Central banks can raise or lower interest rates, which can affect the value of a currency. Central banks can also increase or decrease the money supply, which can also have a significant effect on currency prices.
