How does Quantitative Easing affects the Forex Market?

Hi guys! I’m back with another video to help you with your questions. First of all, keep the question and the comments coming because that gives the topics for these videos. What we going to look at is the effect quantitative easing has on the markets. Quantitative easing, of course, is when central bank prints money and basically injects them into a market with the intention of spurring growth and spurring inflation. That basically, gets an economic recovery going. The effect it has on the currency is the devaluation of that currency. It’s a basic law of supply and demand. If you have an excess supply of something you have demand for it going down. The price and the value of that thing will, of course, fall. The currency is no different. The Bank of Japan have done quantitative easing, ECB started doing it in 2014. The Fed did it in 2000’s. They all had triggered the same effect – the currency went down in value. Once again it’s just simply due to that basic law of supply and demand. So whenever you see a central bank implementing quantitative easing you know that the value of that currency is going to go consistently lower during the whole period. So, it is very simple to trade if you hear that the central bank made quantitative easing announcement. You know what is going to happen. Hope that helps. I’ll be back soon with more videos helping you guys to answer your questions.