Global Currencies

Chapter 1

Forex Basics

Chapter 2

Fundamental Factors

Chapter 3

Technical Tools

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Lesson 4. Exchange Rates and Supply and Demand

This lesson explains exchange rates and the theoretic economic principles of supply and demand and how they influence rates. We also take a look at the main actors in the Forex market.

4.1 Calculations of Exchange Rates
What is Being Exchanged?
Calculations of Exchange Rates
Currency Calculator and Live Rate Quotes

4.2 Supply and Demand
Demand, Supply, and Equilibrium
Changes to Demand and Supply

4.3	Actors that Affect Supply and Demand Who Comprises the Forex Market? Exporting and Importing Countries Foreign Investment Flows Banks Speculators
4.4	Central Banks Floating vs. Fixed Exchange Rates Intervention Interest Rates

Lesson 5. Central Banks and Interest Rates

This lesson explains the role of central banks in setting a country's interest rates. It discusses the effects that investment and inflation play in officials' decisions. We will also take one through an example of the Forex market's reaction to central banks' actions and expectations.

5.1 Introduction
Interest Rates Importance to Forex
Interest Rates Dictate Investment
Interest Rates Role in the Currency Markets

5.2 The Role of Central Banks
Central Banks Set Interest Rates
Role in Fighting Inflation
Inflation and Oil
Inflation, Interest Rates and Investment

5.3	Market Reactions to Central Banks – FOMC Example Dollar Gaining Trend Reverses
5.4	FOMC Example Continued Euro Uptrend Continues Fed Official Moves Markets with Hawkish Talk
5.5	Central Banks You Need to Know

Lesson 6. Fundamental Analysis

This lesson explains what fundamental analysis is, and its importance to forex trading. We highlight and explain several macroeconomic, employment, and inflation indicators that help a trader to analyze the health of a country's economy.

6.1	What are Fundamental Factors?
6.2	Reaction of the Forex Market to a Fundamental Release Non-Farm Employment Change Example A Political Crisis Example Safe Haven
6.3	Macroeconomic Indicators GDP Durable Goods Retail Sales Housing

6.4	Inflation & Inflation Indicators CPI PPI Average Hourly Earnings
6.5	Employment Indicators Unemployment Rate Non-farm Employment Change Weekly Claims Average Weekly Claims

Risk Warning

Before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose.

There is considerable exposure to risk in any off-exchange foreign exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair.

More over, the leveraged nature of forex trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin requirement, your position may be liquidated and you will be responsible for any resulting losses. To manage exposure, employ risk-reducing strategies such as 'stop-loss' or 'limit' orders.

Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Forex.com/UK acts as the clearing agent and counterparty to customers introduced by "Global Currencies" for an IB margined forex transactions. FOREX.com is a trading name of GAIN Capital - FOREX.com UK Limited and is authorised and regulated by the Financial Services Authority. FSA No. 190864.