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Home » FAQ » What Influences Prices in Forex Trading?

What Influences Prices in Forex Trading?

There is an endless number of factors that all contribute and influence the prices in forex trading (i.e. currency rates) daily, but it could be safe to say that there are 6 major factors which contribute the most and are more or less the main driving forces for forex trading price fluctuation:

  • 1. Differentials in inflation
  • 2. Differentials in interest rates
  • 3. Current account deficits
  • 4. Public debt
  • 5. Terms of trade
  • 6. Political and economic stability

In order to best comprehend the above 6 factors, you will have to keep in mind that currencies are traded against one another. So when one falls, another one rises as the price denomination of any currency is always stated against another currency.

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