How the Oil Prices affect the Forex market?
Hey guys I am back with another video answering your questions. First of all, keep the questions coming on the posts, the blog the socials because I use them to make these videos with.
The question I will be answering today is how the oil prices affect the Forex market? The answer is very simple. The oil prices are obviously important to certain economies. For example Canada is a major oil producer. So when oil prices go up or down the Canadian Dollar follows.
The oil prices recently (in the 2014 and early 2015) fell quite hard. Thus, obviously, revenues generated by oil production from Canada were much lower. That affected Canadian GDP. Traders, of course, interpreted that as bad news for the Canadian economy. So the value of the Canadian dollar went down.
So, to put it simple, currencies that are commodity dependent are directly linked with how high or lower oil prices go. The reason for that is the effect the oil prices have on the overall economy of that country.
That is how the oil prices affect the Forex markets.
Hope that helps and hopefully you can use that information to make some pips next time you see some big moves on the oil markets.
Source:: Oil Prices – Forex Trading Strategy