03 März 2014
How Forex Affects Us All
You may not be involved in forex trading directly, but the fact remains that you are affected by what occurs in foreign exchange trading every day.
Here are some examples of how this constant flow of currency trading makes an impact on your daily life.
Perhaps the most obvious impact is that currency trading makes an impact on the price you pay for goods and services.
Should you happen to live in a country where the comparative value of your currency falls in comparison to that of other countries, you could find yourself paying a higher price for items that you are used to purchasing at a relatively inexpensive rate.
The reason is that the rate of exchange for imported goods would have changed and chances are the brunt of that change will be passed on to you, the consumer.
These goods may include anything from petroleum products to underwear.
Another way that changes in trading currency impact you is the simple ability to obtain goods and services.
A severe enough change in the rate of exchange could mean that it is no longer viable for certain types of business commerce to continue.
The result will be that you may find that some items that you are used to purchasing regularly will at first become much scarcer and carry a higher price tag, but ultimately no longer be available to you at all.
This will require you to change your spending habits and settle for other goods that you may consider being of lesser quality.
An extreme example would be if you were no longer able to get the imported car parts you need for your vehicle and had to turn to either generic replacements or used parts.
Your investments may also be impacted as well.
While the stock exchange is a totally different process from currency exchange, the fact of the matter is that they do impact one another.
Adverse changes in the rate of exchange can mean your stocks may slow down their process of earning money for you, especially if the stocks happen to be investments in retail companies or any entity that relies heavily on foreign trade.
Changes in your portfolio of course make a difference to your overall financial health, and may especially hurt if your stock portfolio happens to also be your form of retirement plan.
Many people do not give the trading of currency a second thought. Nevertheless, this process that is in a constant flow every day does reach out and touch the lives of each of us in some way. We may find ourselves paying higher prices for goods or services that we are used to enjoying.
In some cases, we may have to substitute for a lesser product, due to lack of availability. We may see our overall financial health impacted, even to the point of wondering about our future and retirement. Keeping up with forex trading is a good idea for all of us.
It should be noted Forex trading involves substantial risk of loss and is not suitable for all investors.