Forex is a worldwide market with sellers and buyers from all walks of life responsible for over 6 trillion dollars being moved each day. With forex trading becoming a worldwide phenomenon, commercial factors have become more critical than ever before.

Commercial factors guide an investor’s decisions and ultimately define the value of currencies at any moment. This means that traders don’t have to always focus on the solid and popular currencies; however, they are an excellent place to begin.

Today a majority of forex traders are very disciplined, and they stick to a particular set of trading guidelines. But still, economic factors will affect them nonetheless. Let’s look at some of the commercial factors that can upset the forex market.

Some of The Commercial Factors That Can Shake Up the Forex Market Include:

International Trade

International trade is very vital to the balance of trade amongst countries. Trade balance serves as the alternative for the relative demand of items from a country. Countries with goods or services that are in high demand globally have their currencies appreciating most of the time.

For instance, buyers must convert their cash into Euros to purchase goods or services from Europe. Therefore, the improved demand of the Euro will make the currency appreciate in value because of the trades.

On the other hand, countries that import more than they export bear the reversal effect of having their currencies depreciate. Their currency is sold in order to purchase other currencies that will pay for the foreign goods or services they need.

Capital Markets

Worldwide capital markets are perhaps the best indicators of an economy’s wellbeing. It’s easy to see the circulation of news in capital markets. There is an unwavering flow of news coverage and the latest info on the dealings of government agencies and multinational corporations.

Also, many economies are industry-driven. Canada’s product-based market is a good example. The Canadian dollar is massively connected to products such as metals and crude oil. So a rise in oil prices will see the Canadian dollar appreciate in comparison to other currencies.

Commodity traders massively depend on economic data to determine the trades they make. In most scenarios, the same information will affect both markets. This makes exchanging currency and commodity relationships a very exciting topic of discussion.

Political News

Politics play a crucial role in the general outlook of a nation and, consequently, its currency’s apparent value. Thus, traders are constantly checking political news and events to predict changes in the economic policies of federal governments.

Such changes can comprise government expenditure and changes in rules imposed on certain industries. In addition, changes in policy with regard to leverage or margin will often have an intense impact on forex markets.

National elections with ambiguous outcomes are always important events for currencies. Exchange rates typically respond well to wins by economically motivated parties. Referendums can also have a considerable effect on exchange rates. For instance, The Brexit vote had a very intense impact on the Sterling Pound when Britain voted to exit the EU.

Economic Reports

Economic reports are the foundation of a forex trader’s manual. Having a financial reports diary ensures that you’re always on the know in this rapid forex market. Some of the statistics that economic reports are founded on include:


GDP may not be the most noticeable commercial stat because it is the reference point of a country’s strength and economic performance. GDP accounts for the overall output of products and services from a certain economy.

Nonetheless is vital to note that GDP is a lagging pointer. This means that GDP only accounts for trends and events that have already happened.


Inflation is also a critical pointer because it shows swelling price levels and a drop in buying power. Many people see inflation as a currency-crushing tool due to a drop in buying power.

In retrospect, inflation can also make currencies grow. This is because it forces central banks to increase rates to control the swelling inflation levels. Inflation is a big topic of debate amongst economists because its effect on currencies is anything but upright.

Final Thought

All in all, the forex market is driven by commercial factors that affect the value of all worldwide currencies. Understanding all these factors will enable you to always be ahead of the competition in the fast-moving forex market.


1 2 3 10
December 28th, 2022

Advantages of using Iron Condors in option trading

An Iron Condor is a popular options trading strategy UK traders use that simultaneously holds four options contracts with different […]

July 3rd, 2022

6 benefits of CFD Trading

CFD trading is a popular way to trade the markets due to the many advantages it offers investors. Among these […]

May 26th, 2022

What does a long position denote in FX trading?

To go long in foreign exchange trading (forex)means to buy with the hope that the value of your purchase will […]

May 6th, 2022

Reasons why you want to Venture into Contract for Differences (CFDs) Trading

Contract-for-difference trading is gradually becoming a common alternative to conventional investing and understandably so because it can help you make […]

April 25th, 2022

CFD guide for dummies

Let’s get started with the basics of what a CFD is. In your typical stock market, shares are bought and […]

March 16th, 2022

How to use the Elliott Wave Theory in ETF trading?

The Elliott Wave Theory is a sensational trading tool used for all markets. Traders familiar with Elliott Wave or who […]

February 10th, 2022

Buying and Selling Cryptocurrencies Via an Australian Exchange

Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and control new units. Cryptocurrencies are decentralized, […]

February 7th, 2022

What is the HODL strategy, and how to use it?

We all know that cryptocurrencies are highly volatile. But there is a strategy we can use to limit the downside […]

January 27th, 2022

Swing trading in forex

What is swing trading? Swing trading is a form of active trading where the trader only keeps an open position […]

January 12th, 2022

Advantages & disadvantages of CFDs

  What are CFDs? CFD stands for contract for difference. A CFD is a financial instrument that allows you to […]