Currency Correlation

This video is on the British pound, its history, and what traders should know about it before trading the GBP.

Several market sessions and centers, 24 hours trading schedule, facilities to borrow funds via leverage, facilities to trade from home, etc. all are helping retail traders to earn money in forex. But simple currency exchanges can’t be solution in all time. A trader must be careful in choosing currency pairs as currencies have some strong or weak correlation and he must encounter all the significant aspects so that he can ensure profitable trading voyage.

Well, my favourite trading pair is eur/usd. I guess that'll work for silver as well (silver instead of euro).

Currency risk, or exchange rate risk, depict the conceivably harming effect that changes in the estimation of a currency pair can have. There is a scope of ways the term currency risk is connected yet it is generally used to portray the negative impacts of forex rates on the estimation of an advantage that is being moved crosswise over outskirts.

Originally Posted by newdigital

If you are talking about fundamental news events so - there are no any pairs there ... we are having USD news (or US news), EUR news and so on.

Just an example - this silver/usd price was moved by the following news event :

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2013-02-03 15:00 GMT | [USD - ISM Manufacturing PMI]

• past data is 57.0
• forecast data is 56.0
• actual data is 51.3 according to the latest press release

if actual > forecast = good for currency (for USD in our case)

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U.S. Manufacturing Index Indicates Notably Slower Growth In January Slope

While the Institute for Supply Management released a report on Monday showing modest growth in U.S. manufacturing activity in the month of January, the pace of growth slowed much more than economists had been anticipating.
The ISM said its purchasing managers index fell to 51.3 in January from a revised 56.5 in December. A reading above 50 indicates continued growth in the manufacturing sector, but economists had expected the index to show a much more modest decrease to a reading of 56.0.
With the much steeper than expected decrease, the purchasing managers index fell to its lowest level since hitting 50.0 in May of 2013.

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So, you can see :

Attachment 5232

Currencies like the Euro (EUR) and Japanese Yen (JPY) can also have indirect effects on silver prices, particularly when these currencies strengthen or weaken against the USD.