In our modern world, all countries are connected through trade and commerce.

What happens in the U.S. affects the Euro Zone and China, and vice versa. For example, if U.S. import demand from the Euro Zone and China decreases, it will affect exports from the Euro Zone and China.

Although China tries switching its economic model to be driven by domestic consumption, there is no denying that it is still very dependent on exports. The same goes for the Euro Zone with its sovereign debt issues. It is the United States’ largest trading partner. If it is unable to resolve its issues, trading volume between the two regions will definitely slow down.

Many countries engage in what we call a “Currency War.” Each country tries to weaken its currency in order to place its goods at cheaper prices, spurring demand for the country’s goods and helping its economy.

A country’s currency value is extremely dependent on economic performance. A country perceived to be doing well will see its currency value appreciate. Check out the economic calendar at www.forexfactory.com to get an idea of what major economic numbers influence the Forex market.

 
To your success as a profitable trader,

Mario

 
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