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The Currency Market Information Edge

Example – CURRENCY MARKETS A reaction to News

All financial market segments react highly to unexpected information or improvements, and market is no exclusion. Look at a situation where the U.S. current economic climate is weakening, and there is popular expectation that the National Reserve will certainly reduce the benchmark federal government money rate by 25 basis things (0.25%) at its next getting together with. Forex rates will element in this rate decrease in the period before the expected insurance plan announcement. If, however, the National Reserve chooses at its assembly to leave rates unchanged, the U.S. dollars will in all probability react significantly to the unexpected development. When the Federal Reserve signifies in its insurance plan announcement that the U.S. market\’s leads are bettering, the U.S. dollars may also fortify against major currencies.
While the significant size and liquidity of market means that new information or reports is generally consumed within a few minutes, its unique features may cause new information being consumed over a longer time in a few situations. Furthermore, the hierarchical framework of forex can give the largest players hook information edge.

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