Influence of US dollar on the Forex market

by Leslie J.McCurdy

When people are trading with more US dollars in Forex, it positively influences the Forex market. We know that Forex is an investment market and traders and brokers from all over the world come here to invest their money. Traders who have been operating their trading service in many countries of the world know that this trading is profoundly influenced by the price of US dollars. More than 82% of the market transaction is being done by dollars in Forex. It does not stop here. If you look at the Forex major currency pairs, you will see that all of these currency pairs have been paired with the US currency. This use of dollar has an impact on the market of Forex and also on the markets where pother minor currency pairs are trading. This article will try to explore the things that you can face as a trader when the US currency is changing its price. You may have a good time, or you can face volatility, all are on the US currency. Even if you are trading with minor currency pairs, you will also face the influence of US dollar in your markets.

When US dollar's price is changed, the other prices are also changed

You cannot sit at your home and trade happily in Forex knowing that the dollar has faced volatility. If the dollar is changing its price, you will have volatility on your market. This dollar is the main currency of Forex, and when its price level is changed from the trend, all of the other currency pairs of the world are changed to adjust with the new price level. Though Euro is a good currency pair and European countries use it for trading, dollars have the biggest influence on any market in Forex. If you are trading Brazilian Real and the price of the dollar has been changed, you will see volatility in your trading market. The market will shift to adjust to the new price level.

U.S dollar index

Those who are trading the Forex market for a long period often use the U.S dollar index to trade the major pairs. For instance, if you look at the professional traders at junomarkets.com then you will be surprised to see that most of them are using the dollar index to find the strength of the green bucks. If you are completely new to this market, then learn about currency correlation. This is one of the best ways to find the best trading assets in the global market.

Making up most of the Forex transaction

If you are trading with US dollars, you will see that it is making up most of the Forex transaction of the world. Traders like to trade with dollars as it is internationally accepted. It is also worldly traded, and the price will not be volatile like the other currencies. All of these have made the dollar the traders' choice of trading, and it has a big influence on the Forex world.

Fundamental factors

Fundamental analysis is one of the crucial elements of your trading career. Many novice traders often trade this market based on the technical review, but this is completely wrong. It's true that your technical analysis skill will help you to find a very precise entry, but it won't help you to ride the trend. Fundamental factors are often considered to be the most powerful price driving catalyst in the global market. So you need to develop your trading system keeping the fundamental elements in mind.

Some traders often trade the high impact news release in the global market. They never think that news trading is one of the most difficult tasks in the world. You need to keep yourself updated with the latest market news so that you can easily find good trades in favor of the market trend.

Brainyforex Newsletter [SUBSCRIBE HERE]

NEW - Forex Tester Software is now available online without download. Click here (Affiliate link).

Brainyforex Tip - EA's to watch;

King Robot Click here. (Affiliate link)

(NB : Affiliate commissions help assist running costs of brainyforex.com without any extra cost for purchaser).

Need software to test and improve your trading strategy? We have special coupon discount codes here.