What moves forex markets?
Like most financial markets, forex price movement is primarily driven by supply and demand.
Banks and other investors tend to want to put their capital into economies that have a strong outlook. So if a positive piece of news hits the markets about a certain region, it will encourage investment and increase demand for that region’s currency.
Unless there is a parallel increase in supply for the currency, the disparity between supply and demand will cause its price to increase. Similarly, a piece of negative news can cause investment to decrease, in turn lowering a currency’s price. For this reason, currencies tend to reflect the economic health of the region they represent.