The people who are in the profession of forex trading know the fact very well that the most traded and the famous currency pair depends a lot on the variations and the fluctuations of the oil prices. The cost of one barrel of oil is been the most important factor and also the indicator of the global economy from long time ago. The records and the data which is based upon the past events, trends and the current forex market conditions indicate towards the fact. The forex experts predict that it is the right time for change over again. There is a strong relation between the oil prices and the forex trading markets and some of the countries economy too is based upon these facts. It is normally seen in the world that the higher oil prices puts some amount of brake on the consumer spending power. We all know one thing very clearly that the biggest source of the oil for the developed and the industrialized countries comes form the petroleum based products. Therefore, the cost of various petroleum products produced depends a lot on the cost of the barrel of oil.
Also in the trade forex market if the oil prices rise, then the production and the prices for supply of the oil to the consumers will naturally increase. So, as a result the expenses of the consumers will increase naturally. Then they have to spend more of the money in meeting their daily expenses and basic amenities. These all will result in a decline in the economic condition of the nation and therefore in reduced forex rates of the foreign exchange market. It carries on until some time when there is any change in the forex market due to the changed economic policies of the developed countries.
The factors which affect the most in the oil prices are that of the change in the weather, the changes in the world politics and many more. It is normally been noticed that the currencies of the nations which produces oil and export it naturally rises. The cost of the currency of the countries that imports oil will naturally drop .It will have an opposite effect on the forex market.