Which factors intervene for generating the evolution of the foreign currencies?. At the Stock market there are many actors that influence on the evolution of the foreign currencies. For example non financial companies, exchange brokers, people in charge of Commercial Banks to influence on bank activities, multinational companies, commercial banks that act as mediators among the ones that supply and those that demand foreign currencies and at last, the Central Banks. On this depends, not only the exchange rate, but also the monetary system, this entity politics modify the incomes in dollars, making them become national currency. Of all these factors depend the evolution of foreign currencies but fundamentally what is important is the exchange rate, this is one of the most important factors while measuring the evolution of the foreign currencies of a nation. The exchange rate is fundamental in economy and also as a thermometer of the evolution of foreign currencies. To establish an exchange rate is important as it allows the conversion of the currency of a country in the currency of other country, making international commerce of goods and services become easier. The exchange rate will determine the competitivity of the foreign currency and of the products of a country, for example agricultural products that are generally exported.Nowadays the evolution of foreign currencies is measured compared to the reference currency that is the dollar, eventhough what happens in the actual world is that the devaluation of the American currency generates an automatic evolution of the foreign currencies all over the world.

No country in the world is self-sufficient, and so everyone tries to commerce at the market goods and services that are necessary for the working of each economy. Those exchanges of elaborated products, raw materials or goods and services are transactions that are done in foreign currencies. Transactions in foreign currencies must be done using the exchange rate that used at the bank market at the moment that those operations are done. Transactions in foreign currencies are included in the perfect market as the supply and demand law works to determine the price or “exchange rate” for all the currencies around the world, so the demand is greater than the supply, the price raises, and vice versa, if the supply exceeds the demand, the price falls. One of the principal problems that transactions in foreign currencies carry out is that they must be done in a common currency among the involved countries. As in the definition is included the idea of a national currency, while doing a purchase or sale of goods we should determine the exchange rate of one currency to the other. Most commercial operations must be done with transactions in foreign currency and the major part is done in dollars so many countries are interested only for the relation between the value of the domestic currency and the value of the dollar. Today in Latinamerica there is a project between the countries members of the MERCOSUR (Common Market of the South), to eliminate the transactions in foreign currency and carry them out with a regional currency, everything is still being discussed but it is an initiative that would improve the commercial relations amoung the Latinamerican countries.

Why is the purchase and sell of foreign currencies a profitable business and what factors influence on the quotations changes?. Today in the foreign currencies market there is a great volatility because of the raise of the crude price and the weakness of the dollar.
One of the person that has predicted what will happen with the crude price in 2008 was Ahmed Kaki Llaman, ex president of the OPEP (Organization od Crude Exporters Countries), who said that next year the barril price could be reduced until 75 dollars, according to Llaman this will depend on the evolution of the economy of the United States and the decision that takes the OPEP on its meeting of the 5th December in Abu Dhabi. It is important to remind that some days ago the proposal made by Venezuela was rejected and supported by Ecuador that has as an aim exchange the dollar per the euro for the crude purchase.
In front of this scenario the traders of the forex market try to do a more intuitive interpretation. A growing of the volatility in the long term is signal that the direction of the pair is strong, while a low of this, shows that the pair will float. The most experienced traders have shown that the most effective formula in the purchase and sale of foreign currencies is to continue with the direction of the pair rather than speculating about the trend as it can take some problems.
Every future decision will influence on the liquidity of the market, in the force in the future of some foreign currencies and the weakness of others, and above all, it will have a great incidence on the purchase and sale of foreign currencies. The foreign currencies market make us live with this constant changes and is our must to be able to carry them out on the best way to be able to take advantage of the situation.

If you want to succeed, investment at any time needs an strict planning and the analysis of the historical and actual situation of the area where you want to carry out the action. Forex market is not the exception to this basic investment rule. That person that wants to put his money here has to consider that cyclical changes influence on a positive ways and in some cases on a negative way generating money losses. At forex market you can plan which are you investment possibilities through the fundamental analysis. What is exactly the fundamental analysis?. In economy, there are some changes that turn the currencies weak or strong. One part of the currencies evolution is based on the confidence that a country transmits. The economic stability is judged through some indicators that are followed by those that operate at forex.In the fundamental analysis there are five important indicators. One is the number of jobs created in the United States, the interest rates, the commercial balabce, inflation and retail sales. The low or raise of some of these indicators can make the value of the foreign currency vary, that’s why the fundamental analysis consider these numbers and is fundamental to pay attention to them. To sum up, the fundamental analysis is following the macroeconomic information that can make the value of the foreign currency vary. It is a tool, as its name says “fundamental”, and important whenever ytou plan a successful investment strategy at Forex.

On what is based the technical analysis and which are the differences to the fundamental analysis?. Market force produces changes on foreign currency prices, the technical analysis function is to say what happens when foreign currency has moved, not to analize which are the causes of these variations. Traders that operate in forex are based on the technical analysis and on the fundamental one, although the most practical one is the technical one as the principal problem of the fundamental analysis is that it needs a detailed knowledge of political and economic issues of a great amount of countries and, for most of traders, this is simply not very practical. The technical analysis has the advantage that it can be applied to many markets and foreign currencies at the same time.It is necessary to consider that technical analysis can not be done by anyone, if you are a beginner in this market is nos advisable to use the technical analysis to develop an investment strategy. It is required to have some experience and knowledge to do a technical analysis, as this is based on graphics that show the market trend. This kind of analysis is very useful and most of the traders use them to develop a plan investment, this means that market time sometimes does not need to take decisions fastly to raise our profits.