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Return To Currency Trading Article Archive   Factors Affecting Forex Markets - How to Build and Keep Wealth in the Current Climate By Ryan Williamson The status of a country\'s economy and the implementation of a country\'s economic policies play a part in the country\'s participation in the foreign exchange market. A country\'s visibility in the foreign exchange market is influenced, by and large, by the following economic conditions. Deficits and Surpluses. A deficit is a shortage in a country\'s expected and required amount of money. This is manifested by the fact that a country has more liabilities than it has assets. Surpluses, on the other hand, are the opposite of deficits. The more deficits the country has, the weaker its currency. The more surpluses the country has, the stronger its economy. Of course when you visit the link in the resource box, you\'ll find out how to profit from the forex markets regardless of the economic climate. Trade levels. Retail, wholesale, and manufacturing are examples of trade levels. These trade levels reflect the supply and demand for goods and commodities in a country. Strength of the trade flow between two economies is reflected largely by each country\'s deficits and surpluses. Inflation levels. Inflation is the increase in the prices of consumer goods. An increase in inflation equates to a weaker currency because the need for that currency in a country rises and therefore cannot be traded for other currencies. Economic growth. An increase in the production of goods and commodities, a significant increase in employment, a strong gross domestic product (GDP), all manifest a country\'s economic growth which is reflected in a currency\'s strength against other currencies. The stronger the currency, the more confident other countries are trading with that country. Want to make money on the forex markets regardless of any external factors? See this forex trading guide for more details! keywords: forex markets | factors affecting forex Currency Conversion Calculator

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