How politics can affect the markets and online trading

There are a wide variety of factors that can affect your online trading experience and the results thereof. It is an almost unsaid consideration that much of a currency’s value is determined by the economic strength of a country and can be determined and affected by a range of external constituents. Even the most experienced trader cannot predict these movements but an informed one will most definitely be quicker to react to the global event that may impact the world of trading.
 
Taking into account –  that on a daily basis, traders, from all over the world – engage in approximately $4 trillion worth of foreign exchange transactions – what happens around the globe will directly affect, stimulate and ultimately control the markets. This is an important detail that any trader needs to take into consideration.
 
With hindsight and as history reflects – any event that occurs on the international circuit – be it good or bad – indirectly affects the markets as a result of the direct effect it will have on the respective economy. These events can include changes in leadership, takeovers, shifts in international relations as well as respective trade agreements and they can all result in both a boost or alternatively a downfall in the market. These changes will affect all types of online trading, even those you never heard about but are very popular among traders.
 
In conjunction with other external factors politics undeniably have an affect on the markets. An example of this could be the assassination of JFK, which resulted in low country morale ultimately reflected through financial traders’ concerns in investing and trading at the time. With the pending US election, traders will no doubt be watching the markets carefully, as the results and outcomes will no doubt directly affect the markets. Be it Trump or Clinton – their respective party policies and their own financial standpoints – are ultimately being viewed as the defining factors in the potential stability or instability of the U.S dollar – a huge indicator in trading as we know it. Pre-election polls are often considered a source of information for online traders, who rely on the information therein to predict the outcomes of trading. Changes in government also suggest a change in the populations ideology, which may result in changes to financial or fiscal policy that indirectly affect currency value. A political party or even a  presidential candidate that aims to boost the economy will also indirectly affect the value, not only of the currency, but of the trading.
 
It is also important not to discount the unexpected election, the one that may arise out of a country’s vote of non-confidence or corruption scandals. Situations such as these can create mayhem for online trading and the markets, especially if the context reflects cases of upheaval, protests and work stoppages among the general population. The uncertainty and resultant political upheaval will no doubt affect the country’s economic standing and in essence see a drop in the country’s currency weighting.
 
It is essential to remember that a natural indication of a stable market and strong foreign exchange – one worth trading – is a strong economy. With a low rate of unemployment a sturdy economy will prevail – the opposite of course is true as well. Believe it or not – many online traders or brokers will rely on international news as an excellent indicator or source when making their final trading decisions.
 

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