Why do CURRENCY values change?

So why do currency values change?

There are three apparent reasons for this.

1. Currencies react to political and economic news. The #Brexit issue is the most recent political mania. Such issue is affecting the currencies specifically pound. In my recent blogpost I showed the immediate effect of votation. Please scroll down to the previous posts to check it.

2. Speculators drive the market such as the technical analysts who takes advantage of either bearish or bullish market.

3. Of course there's the international business flows. The law of supply and demand affects the currency fluctuation. For instance, oil drives the market fluctuation. 

What is a FOREX Spread?

A SPREAD in Forex Trading is the difference between the bid and the ask price. Otherwise knows as the variance between the buying and selling prices. Normally, the proceeds go to the broker/specialist that handles the transaction.

So what is a bid and ask price?

Selling price is the BID price and buying price is the ASK price.

Let's look at below image:

We have here an example of AUDUSD, below the currency name you will see that the spread is 16. Such is the difference between 0.74017, the selling price and 0.74033, the buying price.

Note that the closer the spread to zero means the better it will be to trade because reaching break-even point is not going to be very difficult to achieve.

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