The USD/JPY pair hit a new 24-year peak at around 146.85 on October 12. On the same day, the GBP/USD pair bounced back from the 1.095 mark, just hovering around the 1.1100 mark. USD/CAD has been retreating since its highest level in May 2020 to land at the 1.3830 mark on this very day. The EUR/USD pair is currently feeling the heat at the 0.9700 mark. The US Dollar seems to be getting further boosts from its Feds thanks to aggressive economic policies.
The market is livid at fresh predictions of another rate hike in the month of November. While the Bank of Japan (BoJ) shows no signs of a hike in its interest rates, the Bank of England has confirmed its withdrawal from the UK Government Bonds. However, in order to calm the investors, a reversal to this decision seems to be inevitable.
The US treasury secretary Janet Yellen has confirmed that the US policymakers are not perturbed by the strong dollar. However, the British are expecting significant monetary policies in the month of November to further subside the inflationary pressures, stemming from the rising energy prices. The Germans are hinting at recession, sliding by 0.4 percent in 2023 and forecasting negative growth figures for Q3 CY22, Q4 CY22 and even Q1 CY23. Worth mentioning is the fact that oil is sliding due to a strong US dollar and due to fears that a global economic slowdown would diminish demand. This comes at a time when the OPEC and the US Department of Energy cut their oil production forecasts for 2023.
Betting on Big Cash
The volume of currency trading is reportedly more than USD 6 trillion per day as of 2022, which is larger than the world’s stock or bond markets. Traders in the forex market pit two currencies of two nations against each other. Basically, they make money when the exchange rate between the two legal tenders move higher and earn short sale profits when it falls low.
Unlike the stocks, a forex trader only pays a rollover fee instead of pumping in capital to open a short sale position. These traders handle those accounts where the money constantly changes its value in reaction to daily profits and losses. Clients need to read through the fine print of the trader’s documents in order to unearth any kind of hidden fees. Ideally, the fees are charged only for commissions, expert counsel and execution of withdrawal requests.
Ensuring the right opportunity
It is constantly advised to clients to prefer brokers that are duly regulated and to select the type of account offerings that suit one’s investment goals. The choice of the Currency Pairs available with a broker also helps in the selection process of a forex trading account. Finally, the platform used for trading should incorporate all the technical and fundamental analysis tools and features that enable quick decisions and easy exits. A well-designed trading platform can prove to be the biggest factor for a successful trading experience. Many of the platforms today are coming with a bunch of customizations, various order entry types, automated trading options, strategy facilitation, backtesting options, alerts and panic situation handling and many more. A good forex broker platform will enable the investor to invest more time into analysis and strategizing, further improving the odds of success in the competitive forex market.
Australia-based forex broker, Go Markets has grabbed our attention to win the ‘Most Trusted Forex Broker Mauritius 2022’ and ‘Best Forex Broker Mauritius 2022’ titles this year. Founded in 2006, the online forex trading platform offers Margin FX and CFD Trading to individuals and institutional clients. It is widely accepted as the first MT4 broker in Australia. Currently, other than Forex Trading, it specializes in commodities, Metatrader 4, Cryptocurrencies, Webtrader, Multilingual account management, and CFD (Contract For Difference).
Go-To Brand for Forex Trading
Go Markets gives access to over 50 currency pairs and avails leverage up to 500:1. They offer Shares CFDs with 200+ ASX shares, 80+ US shares and 70+ HKEX shares with a leverage up to 5:1. Similarly in Index CFDs, Go Markets allows trading in popular markets like FTSE 100, CAC 40, US 500 and ASX 200. It is also a powerful platform for a range of precious metal pair trading and commodity CFDs.
The forex market is said to be steadily growing since 1970s, from a value of USD 5 billion to USD 5.5 trillion in 2017. The stable growth of the forex market can be attributed to the following factors – easy accessibility, regular fluctuations (leading to more trading opportunities), advancements in trading platforms and techniques, rising diversity and volume of the forex transactions, and the evolution of a whole new ecosystem that makes efficient risk management possible.
Reportedly in 2021, the forex market was valued at USD 2.049 quadrillion (2049 Trillion), with the daily market turnover at around USD 6.6 trillion. With over 88 percent of the forex trade comprising the US Dollar, it does not come as a surprise that it is the most traded and relied upon currency in the world today. Reports are predicting a CAGR growth of 7.5 percent till 2026. This could be further boosted by the introduction of 24/7 trading, high transactional transparency, and higher trading volumes in the forex market.
Blog By Ujal Nair
