Knowledge of various currencies in Forex

An important part you need to know about the strategies for investing in Forex is the knowledge of the various currencies. The average investor usually focuses on known market currencies such as the sterling and the dollar, but there comes a time where it is good to take into account less commonly traded currencies.

Each country has a different handling of the economy, while maintaining the same basic principles of trade. The geographical location, form of government and even population growth have an important influence on the value of the currency. The knowledge of various currencies must be taken into account in the fundamental analysis of Forex, in which operators seek to have all the information available in order to plan future investments.

For example, Japan has one of the strongest and most stable economies in the world; it has one of the highest GDP (gross domestic product) of the seven countries that make up 80% of Forex. Japanese economic policy focuses on promoting growth and reducing inflation. These measures have been so effective that now they are obligated to stimulate demand rates.

The Japanese yen is the reserve currency of excellence in Asia thanks to its stability. Japan has a strong economy but its population development is stagnating; birth is not balanced in contrast to mortality. Japanese investors usually accept small profit margins, since the stability of the yen permits so.

The most important data to analyze a currency are the GDP, the level of commercial sales, industrial production, inflation, interest rates and trade balances. Usually these data are available on economic information sources such as the Wall Street Journal. This information is usually free and easy to obtain. It also helps to monitor the employment and unemployment figures, new government policies and possible future political actions. By investing in Forex you have to keep all this data nearby because in