Charles Isaiah K Wilson#9

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How do business cycles influence forex markets?

Business cycles—expansion, peak, contraction, and recovery—shape currency strength. In expansion, rising growth and interest rates attract capital, strengthening the currency. During contraction, central banks cut rates, weakening the currency. Institutions model cycles through GDP, employment, and inflation indicators, positioning accordingly. Retail traders can monitor PMI reports, central bank guidance, and yield curves. Benefits: aligning with cycles offers medium-term trend opportunities. Risks: cycles are irregular, and geopolitical shocks can override them. Business cycles remind traders that forex moves in waves linked to global growth, not random noise. Recognizing where an economy sits in its cycle helps anticipate currency moves.