Transactions in the foreign exchange market are global in nature. If the global political and economic situation tends to be tense, it will lead to instability in the foreign exchange market, abnormal inflow and outflow of domestic currency, and finally the exchange rate will fluctuate greatly. A country's political situation is stable, the more stable its currency is.

Second, the monetary policy of the central bank.

The influence of central banks on money is very important, including the emergence, development, functions and main business of money. When investing in the corresponding currency, investors need to grasp the objective inevitability of the emergence of the central bank and understand its status and role. The central bank's regulation mainly intervenes through four means:

1. Warning the market. The central bank will make a statement that monetary policy may change through the foreign exchange market, and this verbal intervention will affect the change of exchange rate.

2. Direct entry trading. When the domestic currency continues to be strong, the country will intervene in the exchange rate by selling its own currency and buying other currencies, so that the exchange rate will be beneficial to its export interests. The central bank sometimes buys or sells foreign exchange in the foreign exchange market, and at the same time buys or sells bonds in the domestic bond market, so that the exchange rate changes and the interest rate remains unchanged.

3. Defend the national currency interest rate with the interest rate factor. When the first two methods have little effect, considering that investors need to borrow a lot of domestic currency, countries can raise the interest rate of domestic currency to maintain its value.

4. A country can choose to cancel the free convertibility of its own currency. When all means cannot control the impact of investment on the domestic currency, the central bank can implement exchange rate control to protect the domestic currency. This situation mostly occurs in developing countries. Western countries advocate free economic and financial policies, and generally do not adopt this means.

Third, the impact of economic data on exchange rate.

The foreign exchange market is very sensitive to data, especially the economic data released regularly by some countries, and some even reverse the short-term trend of the currency. Once the data is released, it will have a positive or negative impact. The following are some common data for investors' reference.