Stronger currency influences weaker currency?

ForexHero

Junior member
10 1
Is there such a thing as strong forex currency pair that other currencies tend to follow?

I dont know but I guess NZD is less strong than USD.

I would imagine USD is a very strong currency. So if USD/GBP is rising then USD/NZD will also start rising because NZD cannot influence market direction as much as USD.

Which graph will move upwards first, USD/GBP or USD/NZD?

My guess is GBP is stronger (more demand for) than NZD so is less likely to show big movements.
So USD/NZD will rise first then USD/GBP will rise more slowly (if there isn't too much buying pressure for GBP).

I don't know if I made sense.

If there a table of currency pair strengths?
 
M

member275544

0 0
Is there such a thing as strong forex currency pair that other currencies tend to follow?

I dont know but I guess NZD is less strong than USD.

I would imagine USD is a very strong currency. So if USD/GBP is rising then USD/NZD will also start rising because NZD cannot influence market direction as much as USD.

Which graph will move upwards first, USD/GBP or USD/NZD?

My guess is GBP is stronger (more demand for) than NZD so is less likely to show big movements.
So USD/NZD will rise first then USD/GBP will rise more slowly (if there isn't too much buying pressure for GBP).

I don't know if I made sense.

If there a table of currency pair strengths?
check out this thread:
this man lives and breathes FX
 

tomorton

Legendary member
8,044 1,180
Things like this do vary significantly and quickly. Be especially cautious abut drawing conclusions right now as the Brexit issue is complicating speculation in GBP, EUR and CHF. Slightly longer-term. USD/JPY and all AUD and NZD trades are complicated by the US/China tariff dispute.

For simplicity I track the 50EMA slopes of all the 28 important forex pair charts. This allows me a bullish / bearish view of the range of pairings each currency features in. So for example, I see that 6 out of 7 CAD-based (or re-based) charts in the big 28 have downwards sloping 50EMA's, which is bearish for CAD. So I would be more than usually cautious about buying CAD right now. The 50EMA slope is clearly not the only way to gauge these things.
 

ForexHero

Junior member
10 1
For simplicity I track the 50EMA slopes of all the 28 important forex pair charts. This allows me a bullish / bearish view of the range of pairings each currency features in. So for example, I see that 6 out of 7 CAD-based (or re-based) charts in the big 28 have downwards sloping 50EMA's, which is bearish for CAD. So I would be more than usually cautious about buying CAD right now.
Thanks that's a good idea
 

NVP

Legendary member
37,417 1,950
Thanks that's a good idea

Load up my free Fxcorrelator and set it up to show 50 ma setting .....the default is a 20 ma but 50 is more than ok ....just Beconsistent in what you use

You have now got a indicator that shows the strength of each individual currency against the market .......as you wanted ......

N
 

NVP

Legendary member
37,417 1,950
check out this thread:
this man lives and breathes FX
Thanks guys !

Ok,as,anyone experienced in forex will,tell you there is no guaranteed order in strength vs weakness in currencies ....they vary all the time

Using strengthmeters will show you what is weak and what is strong based on the timeframe and ma you want to see ........like my free Fxcorrelator

What I can say is that some currencies do tend to have more trend strength and volatility than others when they do move ....so you will find that generally gbp and yen do tend to offer much more volatility than the others .......cad also can be lively and indeed NZD can also rock at times ........then the other 4 .....euro usd aid chf can be a little less lively most of the time

To prove this..... load my Fxcorrelator and put it on 20 ma default ......now look at any TF and you will see how frequently either the gbp or the yen appear as the strongest or weakest currency ......it will Ben generally more frequent than the other 6.......

So in answer to your original question ....it’s any yen pair and any gbp pair ......and yes trading the gppjpy therefore is a rollercoaster most of the time !

N
 

Malordana

Member
52 2
The currencies' prices change not only in relation too each other, but mainly in relation to purchase power, especially local currencies, such as NZD. And sometimes there are situations when local currency is strengthening and it's price on market increases. Nowadays you can check UAH/USD quotes, and you will see that UAH is strengthening. But does it mean that UAH is stronger than USD? Of course not. And even if USD will be rising, its doesn't mean that USD/UAH will be rising too. Your assumptions will be correct if all economies and countries' monetary policies will be the same. In this case, yeah, the demand would determine currency strength. But in fact, the local currencies, like NZD, AUD or CAD are more flexible and depend more on their real purchasing power. Moreover, Central Banks can choose more flexible policy to manage these currencies. On the other hand, countries like the US, UK or EU cannot afford to manage currencies as flexible, as smaller economies, as their currencies are not only local currencies, but also world currencies. It is the outcome of Triffin Dilemma.
 

Akinozragore

Active member
114 7
Not at all. There is no simply strong or weak currency, as each currency depends on national economics and world position. I will try to explain. Look at the US dollar. It may be considered strong currency, isn't it? However, Swiss frank is also strong currency, as well NZD or CAD. And all these currency except US dollars belong to relatively small economies. But look and RUB, russian rubble. Russia is 6 in terms of GDP PPP, however, its currency is weak, as Russian economy isn't stable. That's why you should look not on currency, but on national economy, EUR is much more widespread, however it is weaker than Norwegian kroner :)
 

tomorton

Legendary member
8,044 1,180
Not at all. There is no simply strong or weak currency, as each currency depends on national economics and world position. I will try to explain. Look at the US dollar. It may be considered strong currency, isn't it? However, Swiss frank is also strong currency, as well NZD or CAD. And all these currency except US dollars belong to relatively small economies. But look and RUB, russian rubble. Russia is 6 in terms of GDP PPP, however, its currency is weak, as Russian economy isn't stable. That's why you should look not on currency, but on national economy, EUR is much more widespread, however it is weaker than Norwegian kroner :)

Its true that economic strength is reflected in currency strength, but these are macro-effects and no help for trading on a tiny pip scale with a tiny leveraged account off a very short time-frame with a short trade position horizon.

I might be wrong of course, maybe you can show differently how to trade off national economics and world position only.
 
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