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Why USD news affecting other currency?

Discussion in 'Beginners Bootcamp' started by Azlan00IM, Jul 2, 2015.

  1. Addam

    Addam Recruit

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    That is a very pertinent question. Since there is no global currency, US dollar serves as the base currency for most of international trade even when US is not a partner in the concerned trade. Thus any news which affects USD leads to reworking of terms of trade and thereby, value of other currencies.
     
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  2. Etedus12

    Etedus12 Corporal

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    Cause it's really federal reserve currency for whole world now, no matter how you put it. All other big mighty countries like China, Russia and India / Brazil keep their large share of total money in US stored to gain some interest on government level.
     
  3. bigdolly

    bigdolly Sergeant Major

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    They keep US debt because the government is forced to create it to cover trade deficits which is consequence of the dollar bearing the status of reserve currency. Simple math.
     
  4. nahiyar

    nahiyar Private, 1st Class

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    No doubt USD is major currency of the world , all foreign reserves are kept in this currency even countries trade in dollars . It is simple stats that difference in rates of dollar automatically impact on other currencies that are trades in forex market. Some goes to its may be others are reverse from its movement. It is advised when you are going to trade in any pair first analyze dollar rate and its movement in market.
     
  5. carnelian

    carnelian Private

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    USD is a global currency mostly dealing trading and import ,export are taken place in Dollar . All over the world countries are involve in exchanging USD . hat is why when there is high or low position of USD all currencies are affected by it. In forex trading too we can say market trend changes as dollar rate change other currency will be high or low accordingly.
     
  6. Thoris

    Thoris Private, 1st Class

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    Trading USD means affecting all other currencies because for now it's really really good option to trade here for something else. I do not realise how far you can really go in all that matters. You are working with the world standart currency for now.
     
  7. carnelian

    carnelian Private

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    No doubt USD is world's standard currency. I mostly try to choose a pair with USD as GBD/USD , JPY/USD. In this way I am able to beat with market know the right trend of currencies because all are inter related. As Dollar rate is up and high other currency will be effected by it. We cannot ignore it at all. It is dominating currency and we have to follow its analysis even we are not doing trading in USD.
     
  8. Boyd35

    Boyd35 Recruit

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    One currency to rule them all! The main reason that other currencies are reacting to USD moves is simply because all currencies are quoted against USD as well as Oil and Gold. This is general convention on forex market accepted by all countries, and not some personal fixation
     
  9. Boyd35

    Boyd35 Recruit

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    I think dollar is the leader of the currency world as it is the mostly traded currency in the forex market. That is why the decisions of the United States affect most of the currencies. This the main reason in my mind, do you have a better reason than this? Looking for replies!
     
  10. JamesForexSlayer

    JamesForexSlayer Corporal

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    The dollar is the reserve currency for the world. The dollar affects everything.
     
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