What Moves Currency Prices
A 1-minute lesson from the MarketPro academy, one of 24 in forex basics.
Currency prices are ultimately driven by supply and demand for one currency relative to another. That demand shifts constantly for a mix of economic, political, and psychological reasons.
Currency prices are ultimately driven by supply and demand for one currency relative to another. That demand shifts constantly for a mix of economic, political, and psychological reasons.
Core Drivers
- Interest rates: higher rates can attract capital seeking better returns, increasing demand for that currency
- Economic growth and data: employment, output, and inflation reports shape expectations about a country's economic health
- Trade and capital flows: imports, exports, and cross-border investment change how much of a currency is needed
- Political stability: uncertainty or instability can reduce confidence in a currency
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Lesson 11 of 24 in Forex basics
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