Economic factors

• Economic factors

These include economic policy, disseminated by government agencies and central banks, economic conditions, generallyrevealed through economic reports, and other economic indicators.

Economic policy comprises government fiscal policy (budget/spending practices) and monetary policy (the means by which a
government's central bank influences the supply and "cost" of money, which is reflected by the level of interest rates).

• Political conditions

Internal, regional, and international political conditions and events can have a profound effect on currency markets. For instance, political upheaval and instability can have a negative impact on a nation's economy. The rise of a political faction that is perceived to be fiscally responsible can have the opposite effect. Also, events in one country in a region may spur positive or negative interest in a neighboring country and, in the process, affect its currency.