A currency is a unit of exchange that is used to facilitate transactions between countries and regions. Currency comes in the form of paper money, coins, or digital currency. It is traded on the foreign exchange market, and traders can buy and sell currencies to take advantage of the fluctuations of currency movements against each other (exchange rates) to potentially profit from them.
The value of a currency can be influenced by a variety of factors, such as:
Economic health: The overall health of an economy can influence the demand for a currency, which can have an impact on its value. Some economic indicators that traders monitor are GDP growth, inflation rates, and employment figures.
Interest rates: Central banks may adjust interest rates in response to economic conditions, which can impact the demand for a currency, in turn leading to its appreciation or depreciation.
Political stability: Political instability can lead to a decrease in the demand for a nation’s currency, which can lead to its value depreciating. On the other hand, political stability can lead to an increase in a currency’s demand, which can lead to its value appreciating.
Market sentiment: As the forex market is decentralised with no single entity controlling it, the value of currencies is driven by supply and demand. The overall mood and sentiment of the market can therefore impact currency value.
ADSS offers a range of global markets for traders, with opportunities in indices, commodities, forex, equities and more. We also feature tutorials, how-to guides, and weekly webinars to help you navigate the financial markets and find better trading opportunities. You can start trading and investing online by opening a live trading or demo trading account.