What really drives the foreign exchange markets
If you’ve spent any time observing the financial markets, or watched the talking heads on Business Sunday, you’ve probably gained the impression that currency markets are driven by fundamentals - interest rates, trade balances - or maybe by technical factors - moving averages, candlesticks, the entrails of a goat. Nope. What really happens was best illustrated around midday today, Australian eastern time.
About five minutes before midday (UTC+10), the pound sterling (GBP, sterling, cable, or whatever other name it goes by) suddenly plummeted sixty points in about five minutes.