Market Influences

Economic:
•Economic policy adopted by government agencies and central banks, economic conditions revealed through economic reports, and other economic indicators including government fiscal and monetary policies.

•Government budget deficits or surpluses: The market usually reacts positively to tight budgets and surpluses; negatively to increased deficits.

•Balance of trade levels. The trade flow between countries illustrates the demand for goods and services, which in turn indicates demand for a country's currency to conduct trade. Surpluses and deficits in trade of goods and services reflect the competitiveness of a nation's economy.

•Economic growth and health. Reports such as gross domestic product (GDP), employment levels, retail sales, capacity utilization, detail the levels of a country's economic growth and health. Generally, the more healthy and robust a country's economy, the better its currency will perform.