Foreign exchange rates are the buy and sell price of the world’s currencies. Forex rates are constantly changing. These changes are usually small movements unless the market is going through a particularly volatile period.
Currencies on the foreign exchange market are traded in pairs. When you buy a particular currency you are selling another. The price of buying one currency and selling the other is the rate of exchange or Forex rate. The rate is affected by supply and demand. The higher the demand for a currency means the price for it also rises. For example, looking at the EUR/USD currency pair, if more people are buying (for example) the US dollar then there is increased demand and therefore less supply in the marketplace. This pushes up the value of the dollar against the euro.
Commodities like gold, silver and oil are exchanged in the Forex market in the same way as currencies. They are commonly traded against the US dollar. Often (though not always), gold and the USD have an inverse relationship – when one drops the other rises and vice versa. Because of this relationship, gold as an investment is often used as a hedge against the USD.
Forex market makers provide online platforms for the individual to trade currencies. As a market maker, easy-forex® has real-time rates that are constantly updated to accurately reflect the current Forex rates in the market. Customized currency rates tables allow Forex traders to select which currencies they wish to have visible as they trade. A cross currency matrix shows up-to-the-minute Forex rates of all currencies available for trade on the easy-forex® platform.
The Forex market goes through periods of volatility where Forex rates can make dramatic shifts. These times offer great opportunities for Forex currency trading. But these sharp shifts in Forex rates can also be risky. Correctly anticipating the rise or fall of a particular currency and its subsequent purchase or sale will lead to profit. However, many factors should be taken into consideration. Why is the currency on the rise? What has happened in the market to trigger this rise? How long is it likely to last? Is it a correction – a move back to what is a more realistic rate of exchange for this particular currency pair? The trader should consider these questions and make well-informed trading decisions. To keep their traders abreast of the financial markets, easy-forex® offers many trade tools.
Prudent trader’s stay informed of the financial markets. easy-forex® has daily and weekly outlooks that review Forex rates and also forecast the coming day or week’s rates. Live news feeds from Reuters and a financial calendar of economic indicators are just some of the tools available. One of the more innovative features of the easy-forex® trading platform is the SMS Alert Service. Traders may sign up to this service and set Forex rate alerts. This allows the trader to walk away from their computer and be alerted on their mobile phone when a particular exchange rate is reached in the market.