Currency Trading in the currency war Shadow

At first I'm going to define what deity currency war? 

  

Currency war, also known as reduction, competitive position is crystallized among the world countries so that these countries compete against each other to achieve a relatively low exchange rate of the currency for the country. When the low purchase price for a particular currency, for example, when you have a dollar can buy five units of the currency of that country and now have the ability to buy six units of that currency and thus the price of that currency. Reduced thus the price of exports from that country, according to the previous example If we assume that the price of shipment of exports is equal to 1000 units of the local currency, and thus the cost of dollar was equal to 1000/5 = $ 200 and became equal to 1000/6 = $ 166 which increases the demand for exports . And become thus more expensive imports According to the previous example If we assume that the price of the shipment of imports equal to $ 1,000, the cost to the country was equal to 1000 multiplied by 5 = 5000 local unit and became equal to 1000 multiplied by 6 = 6000 local unit. Which leads to the growth of local industry and thus Zaaderh employment opportunities, and an increase in the demand for local products from local and foreign markets. But it can harm the increase in the prices of imports purchasing power of citizens. This policy may also lead to get revenge from other countries, which in turn could lead to a general decline in international trade, and damaging to all countries. And in the event of the use of all States to this policy at the same time. When increasing import prices and lower export prices in all countries at the same time it will not happen trading between these countries. 

  

Thus, the currency war do not use guns or swords or even daggers, but each State to reduce the price of its currency to achieve the above-mentioned equation. 

  

Be responsible for determining currency rates in all countries are the central banks of these countries they may be concerned that the increase of exports and boost the economy's current state, that support the economy by increasing exports is a great feature and one of the best ways to improve the product and the overall economy in any country. For example, I've had a historical reason for the prosperity of Japan is the process of weakening the yen. 

One of the most important central banks, the Bank of Japan, the central bank of the United States, and the European Central Bank, the central bank of the United Kingdom. Where control of these banks with interest rates of currencies.

If the central bank decided to increase interest rates. The interest rates will impact directly on the credit market (loans), the rise in interest rates makes loans more expensive and therefore less demand for loans, and when less demand for loans, at least thus investment and thus less employment opportunities and thus less consumer spending and up-market to the stage of the economic downturn decreases Then GDP GDP. When we reverse this equation, we get an increase in consumer spending, leading to increased demand for goods and thus inflation in the economy, which increases the gross domestic product (GDP) GDP. That by the processes of change in interest rates, the central bank tries to any state to maximize employment, price stability, a good level to support economic growth.

The trading in the currency trading market is a game of expectations. When err market in expectation a central bank policy, you can see sharp moves in technical analysis. So you have to keep on the lookout on economic news and technical analysis, especially in light of the existence of a state of currency war, they help you to trade in the Forex market by predicting the movements of the currency markets and thus can take the necessary measures to reap the gains from trading. And remember password "GDP" This word, which means a lot of central banks.