Some news can affect the Forex market significantly, so it is necessary to be tuned in with the latest news to know what is happening and make better decisions to trade Forex online; for example, the yen fell against the dollar and the euro on Monday (09-09-2013) losing ground after Japanese stocks rallied following Tokyo's winning bid to host the 2020 Olympics and an upgrade of second-quarter GDP, according to Reuters.com
It is known that the Olympics bring lots of tourists to the host country. If Japan wins the hosting of the games, that could be translated into big gains for the Japanese economy and a shot in the arm for Prime Minister Shinzo Abe who is attempting to reflate the economy after decades of below-par growth and deflation.
The Tokyo bid committee reckons that hosting the Olympics would boost the economy – from construction and higher prices – by 3 trillion yen ($30.14 bln) over the next seven years.
This boosted the Nikkei, which jumped to a five-week high and since the yen has an inverse correlation with Tokyo shares, the currency dipped. A sharp upward revision of second-quarter Japanese gross domestic product also lifted stocks.
Knowing the correlations between currencies and stocks or commodities is a good tool to trade Forex online and be successful.
The dollar rose 0.4 percent on the day to 99.55 yen having hit a high of 100.11 yen earlier on Monday (09-09-2013). The euro rose 0.5 percent to 131.25 yen.
Both the dollar and the euro have gained more than 14 percent this year against the yen for the trade Forex online market, as the Bank of Japan embarked on a massive monetary stimulus program in April to boost the export-driven economy.
"The Olympics bid has added a bit more to the underlying negative yen trend," said Paul Robson, currency strategist at RBS Global Banking.
But investors that trade Forex online, will be wary about selling the yen, or the Swiss franc, in a big way given concerns of a possible U.S.-led military strike against Syria. Both currencies are seen as safe havens during times of crisis. The White House on Sunday pressed ahead with the uphill effort of persuading Congress to approve a military strike.