Some examples of trade flow dependent economies include:

Some examples of trade flow dependent economies include:



Canada - oil exports



Australia - precious metals exports



New Zealand - agricultural exports



Each of these countries depends largely on their foreign exports for economic growth.

Remember when Japan's economy was booming due to all the cars and electronics they

were exporting across the world?

A country dependent upon

foreign investments. The

dependent countries.

This is because the financial investment markets, on the whole, are very large and highly

liquid in these countries. They draw in a steady pool of investors both from within and

without, but are particularly reliant on the influx of capital from foreign investors.

Take from this another set of potential Forex signals to watch:

capital flow brings in the bulk of its income by attracting outside,U.S. and Great Britain are primary examples of capital flow



Any event impacting the flow of trade



And keep in mind that these events may be something more than new trade agreements or

faltering investor confidence. Natural disasters, for example, can have an impact on trade

dependent countries that rely on agriculture for their exports.

Any event impacting the flow of capital

Geo-Politics

Unlike stocks, currencies are quite sensitive to events in the political sphere. In a way,

currencies are a lot like “flags”

country they serve.

It is not unusual for foreign investors to devalue currencies intentionally as a way of sending

a message about a country's politics. It is also quite common for adversarial governments to

take actions towards devaluing the currency of an 'enemy' or problem country.

One needs to look no further than the current controversy surrounding the United States'

war effort. The Dollar has taken a beating along with the U.S. in terms of image.

Many countries are now threatening to denominate their oil exchanges in currencies other

than the U.S. Dollar (which has been standard since the 1970s'), as well. If that occurs, the

almighty Dollar may crash farther than it has at any time in history.

So, pay attention to politics as much as you can!

Any time a major political player does something to indicate a vote of confidence (or lack

thereof) in his own country or another, you're sure to see a corresponding change in

currency value.
- they may represent everything good and bad about theJapan - electronics and automotive exports

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