Forex markets have fallen in the past week.
Forex markets are down about 30 per cent from their peak over the weekend, while other sectors including metals, energy and metals derivatives are trading higher.
The drop in the forex market has been driven by falling demand from China, the largest market for the currency.
But while Chinese demand for forex has been the most significant factor in the fall, there are still other key factors that are weighing on the markets.
One of the biggest factors is that there is a shortage of supply of gold and silver, which has caused the price of gold to fall by more then 50 per cent.
Silver has fallen by almost half this week, with the price dropping by about $US100 in the last 24 hours.
Gold prices are also dropping by around half this year.
However, the recent sell off has also hit other precious metals.
Demand for gold has dropped by more that 50 per cen…
Source: The Financial Times (Australia), Getty Images, Source: Bloomberg News (UK), Getty News (US), Bloomberg News, Source 1 / 1 Forex price drops by more the 30 per Cent in the Past Week, but there are other major factors, the Financial Times says, as forex stocks have slumped in the market in recent days.
China is still the biggest trading market for forexi, but it is also the main player in the world of gold.
With gold trading at around $US1,400 per ounce, the global demand for gold is still about 50 per per cent lower than it was at the peak.
In other news: The Reserve Bank of Australia has cut interest rates for the second time in as many weeks.
Australia’s central bank cut rates to a record low of 0.25 per cent, in a bid to boost economic growth.
Ahead of the cut, the RBA also raised its forecast for the economy this year from 2.5 per cent to 2.8 per cent – the second-best forecast from any central bank in the country, behind only the Bank of Canada.
“The recent fall in global gold prices has significantly impacted the trading volumes of some of the other key forex markets, including the metal metals, futures and precious metals,” the RBR said.
On Thursday, a US Federal Reserve report showed that the number of companies with more than $US10 billion in deposits fell by nearly 30 per ceno… “With so much at stake, it’s important to remember that our financial markets have been battered for some time, and the risks of a more severe downturn in the broader economy continue to grow,” the Reserve Bank said.