Why USD news affecting other currency?

EuroTrader

Sergeant Major
Messages
1,048
Yes dollar is world's leading currency and When it is changed all other currencies are effected. Same in forex market its effect is seen. Monitoring currencies fluctuation regularly traders will know how they are changed when dollar changes its rates. Not in forex in real business too all trading is related to $ all over the world.
 

Setto

Recruit
Messages
1
First of all as we know there are hundreds of currency pairs that are interconnected to each other. Like taking your example we have a pair of EUR/AUD on the other hand we also have a pair of EUR/USD and AUD/USD. Thus any news on USD will make changes with some percentage on the latter currency pairs; the amount of change depends on the type of news. Thus the effect on the latter two currency pairs will automatically affect currency pair of EUR/AUD.
Accounting firms near me 6530 Trask Terrace Alexandria. Suppose, due some news on USD the Currency pair of EUR/USD appreciated by 2% and AUD/USD appreciated by 1.5%. Now mathematically cross multiplying the pair EUR/USD = AUD/USD, we cancel the common term i.e. USD. So the net effect on apperception of respective currencies will thus effect remaining pair EUR/AUD.
At the end you should also be concerned about different factors like type of news, country economy, globally affecting factors. We should also look technically and fundamentally what that pair is predicting.


Yes, it requires careful analysis!
 

bigdolly

2nd Lieutenant
Messages
1,027
Yes, it requires careful analysis!

Because many pairs are quoted in USD, while cross pairs and exotic pairs which doesn't include dollar are affected through cross pairs because of correlation with US dollar. After all US currency has reserve status that's why its is so important for markets.
 

Albert Dcosta

Corporal
Messages
70
Most of the trading in the world is done through dollars and major pairs include USD that affects major currencies automatically. Everyone in financial market is looking closely towards dollar and it ultimately affects others when sudden changes happen due to some news data.
 

Glastonburyk

Private, 1st Class
Messages
56
I found out that even if the currency pair is not related to USD, EUR AUD for example, it is still somehow being affected by USD news. My position was suddenly reached stop loss in a few minutes. Why is that?
Most countries hold dollar in reserve
 

ForexViking

Recruit
Messages
130
I found out that even if the currency pair is not related to USD, EUR AUD for example, it is still somehow being affected by USD news. My position was suddenly reached stop loss in a few minutes. Why is that?
Think most countries use usd as reserve
 

DaveT

Sergeant
Messages
361
It is the dominant currency so will always have a ripple effect to other currencies
 

Olieng38

Sergeant
Messages
140
USD is the most powerful currency pair and it’s the most widely used one. Most of trades in international deals are based on USD. Oil purchases are made using USD. Everything is sold and bought using USD currency. So when it moves, all other currencies are affected. There is another concept as correlation. It’s the mutual benefit for countries. If two countries have mutual interest so increase in one’s value would mean increase in the other one’s value too. So even for other currencies beside USD, they all are somehow correlated and will affect each other.
 

ele020

Private, 1st Class
Messages
55
The United States is considered the world’s most powerful country, whether it’s in the domain of military affairs, geopolitics, industry, energy, science, culture, and technology. It is even called a “financial superpower.” As we all know The United States has the largest economy in the world and the U.S. dollar is the world’s reserve currency. This means that the U.S. dollar is a participant in about 90% of all forex transactions, therefore USD news affects other currencies as well.
 
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