Currencies: Balancing inflation and world events

摘要

While forex markets struggled to stay ahead of events in 2010, a return to more normal fundamentals may be underway in 2011 as central banks decide how to handle inflation.rnIn most years, interest rates are the main drivers of the forex market. That paradigm was upset last year as historically low interest rates around the world created a market that was driven by events and central bank actions, and often saw some currencies strengthening by default. More recently, commodity prices also have become a factor (see "Top forex fundamentals," page 46).