The way forex exchange works is quite challenging. There are many terms and terminologies that those who deal with the forex exchange use to refer to different changes in the forex market. Some of them are common across the world but
there are some that are used in certain forex markets. One such terminology is the forex tick. A forex tick is not the bug that sucks blood from animals rather it is a terms that refers to an event where the price of a currency pair changes from X to Y. The tick occurs when the new price is registered.
There are many things that may trigger a forex tick to occur hence they are discussed below. The impact of each differs though they all revolve around the same thing.
The first is the inflation in a given country. Inflation is situation where the economy is faced with development challenges such that the economy is spending more than they should. Inflation will determine the spending limits of people thus in the forex market people will stop making new purchases. As such, this will trigger the decline in how businesses trade their shares. Inflation's basically instill fear on the investors thus that decline may lead to high prices caused by uncertainty. However, the government may decide to resolve the inflation's rate by regulating how much money is within the population.
Taxes are another major factor that may trigger a forex tick. When there are changes in the tax rates, it is likely that people are going to spend less. When people spend less the demand for money increases thus may lead to forex market changes. High tax rates discourage investors from investing in a given country hence when taxes are high development will be hindered. Lower tax rates in the other hand will attract more investors thus the economy will grow. It also makes investors feel confident enough to invest more. When investments are made, they can trigger a tick due to introduction of new shares and more foreign currency in the economy.
In any country and economy, there are many factors that contribute towards development. As such, the major contributors are mainly things to do with the government. The government policies may attract investors or chase them away. An economy that attracts foreign investors will bring in more foreign currencies hence the more they are within an economy. The more the foreign currency there is in the economy, chances are that it will trigger a forex tick.
A forex tick can be on the positive or the negative and is not seen as threat to the economy. This is because there must be changes within the economy. A healthy economy must experience upward and downward movement in the forex markets. A forex tick can occur severally during the day as the trading within the day proceeds. The economy may be experiencing different factors forcing it to drift up and down thus impacting on how currencies are trading. In some instances, a lot of other outside forces affect a lot on how the money markets fair.
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