Trading the axis of economics

摘要

At the heart of the appeal of forex trading is its global nature, offering 24'hour trading from Sunday evening to Friday afternoon. Yet, its global nature means that forex traders cannot extricate themselves from worldwide geopolitics. Whether it is war or peace, terrorist attacks, gold moves or manipulation, or speeches by Alan Greenspan or Colin Powell, everything relates to everything else ― and that everything else includes forex exchange rates. The geopolitical game board is dominated by the three major pieces that provide a picture of the world's financial health: the U.S. dollar index, gold and the Dow. The dollar index is an accepted measure of the balance of world forex markets. It is used by portfolio managers and by institutions to decide asset allocations. Gold is legendary as a barometer of value, providing not only a measure of a currency's worth but also a refuge for capital in times of crises. The Dow is a globally recognized symbol of the United States and can be viewed as an acid test of expectations of the future of the U.S. economy and markets.