Many other factors have an important impact on a country’s currency.

These include —

Political issues, political crises, social factors and statements of important people.

Political issues are discounted as the time passes by. It means that the nature of this problems are known to everyone, so little by little investors and traders take the appropriate actions (i.e. selling their positions as the issue gets worse and worse). Impacts of these factors are not violent in the Forex market.

On the other hand, political crises are not known until they happen. They can have violent and significant impact over the exchange rates.

Social factors can have important effects in the Forex market, especially if they are unexpected. Major strikes or terrorists attacks are example of social factors.

Statements of important people like monetary and treasury officials are also important factors. They can have significant impact on currencies.

Amongst the most influential people are:

Ben Bernanke, Chairman of the Federal Reserve

Ben Bernanke

[Image 1]

Henry Paulson, US Secretary of Treasury

Henry Paulson

[Image 2]

Jean-Claude Trichet, President of the European Central Bank

Jean-Claude Trichet

[Image 3]

Peer Steinbrück, Finance Minister of Germany

Peer Steinbruck

[Image 4]

Toshihiko Fukui, Governor of the Bank of Japan

Toshihiko Fukui

[Image 5]

Fukushiro Nukaga, Finance Minister of Japan

Fukushiro Nukaga

[Image 6]

Mervyn King, Governor of the Bank of England

Mervyn King

Images: WikiPedia

All information correct as of early 2008

By: Raul Lopez

Section V: Other Factors that Influence the Forex Market

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