How do the banks affect the forex at news events?

Hi,
I have a question, may silly question for the majority. I have searched in internet, but couldn't find the answer.
When the news event occurs, the banks will put their orders to sell or buy. Suppose speaking about Eurusd pair. We suppose new news event occurred, which negatively affect the euro. The banks and big traders will sell the Euro. When they are selling, I suppose that there are buyers. When someone sells euro, there must be a buyer. So why does the euro then keep falling?
Can somebody clarify this point please?

It's generally considered that the banks do use news releases to move the market in the direction that suits their order book. Which is the general consensus on the market as a whole. The banks and big players go through a period of accumulation of positions and then a sell-off of these positions. It's far more complicated than this in reality, but always remember you are not the one in control of the markets.

While every sell order has a corresponding buy order, the direction of a currency's movement is determined by the overall balance of buying and selling pressure in the market, as well as by broader market sentiment and fundamental factors. So, even though buyers may step in, if there is overwhelming selling pressure, the currency can continue to depreciate.

The forex market is primarily driven by general economic factors. There's always a buyer and seller for every trade. But let's say the news story scares more people than simply banks. Suddenly, there are more sellers of euros than buyers willing to hold them at the current price. This difference drives down prices until sellers get worried and stop selling, or until enough buyers are pulled in by the lower price.

There is always a buyer and seller for every trade but the seller may have to reduce the price in order to find a buyer - hence the price falls. Likewise, if there is high demand for a currency the seller can choose to only sell at an increased price - hence price rises

thanks for replies

Banks play a pivotal role in influencing the Forex market during news events. When significant economic data or geopolitical events unfold, banks respond by adjusting their currency positions. Large financial institutions, armed with substantial resources and expertise, swiftly interpret the implications of news releases, shaping market sentiment. Banks' reactions trigger widespread buying or selling, causing currency values to fluctuate. Additionally, central banks may intervene to stabilize their national currencies or implement monetary policy changes, amplifying market impact. Traders keenly observe these bank-driven movements, seeking opportunities or hedging against potential risks. The interconnected relationship between banks and the Forex market intensifies during news events, shaping the global financial landscape.

Simple. During news events, there is an imbalance between buyers and sellers, and traders worldwide might react at different times (as you know when the trading sessions overlap). This can prolong the selling pressure and keep the Euro's price falling.

They have relative effect and control over the media and liquidity so, they are big players here.

ialhamdazeez posted:
Hi,
I have a question, may silly question for the majority. I have searched in internet, but couldn't find the answer.
When the news event occurs, the banks will put their orders to sell or buy. Suppose speaking about Eurusd pair. We suppose new news event occurred, which negatively affect the euro. The banks and big traders will sell the Euro. When they are selling, I suppose that there are buyers. When someone sells euro, there must be a buyer. So why does the euro then keep falling?
Can somebody clarify this point please?

Banks play a significant role in the forex market during news events through their participation in currency trading and market-making activities. When important news is released, such as economic data or central bank announcements, banks often adjust their trading positions to capitalize on market movements. Additionally, banks may provide liquidity to the market by facilitating trades for their clients or acting as counterparties in transactions.

In essence, while every selling transaction involves a buyer, the imbalance between the number of sellers and buyers, combined with market sentiment and speculation, ultimately drives the price downward. This is why even though there are buyers, the Euro can still keep falling in value against the US Dollar in response to negative news.

It's not only about the news, it's about the liquidity available in the market too, they can have a serious effect on the market whenever they feel like it basically.

I'm new to forex trading and have been following this fascinating discussion. There's one thing I'm still trying to wrap my head around. Given that for every seller, there's a buyer, how exactly do large orders from banks during these news events cause the currency to move significantly in one direction? Is it simply about the volume of what they're selling or buying, or is there more at play in terms of market psychology and the anticipation of other traders' reactions? Would love to hear your thoughts on this!

In the currency markets, market makers facilitate trading by providing liquidity. They do this by constantly offering to buy or sell currencies at publicly quoted prices. Market makers make money through the bid-ask spread—the difference between the buying and selling prices.

Supply and demand dynamics determine the prices at which market makers are willing to buy and sell currencies. When demand for a currency increases, its price rises; when demand decreases, its price falls. Similarly, when the supply of a currency increases, its price falls; when supply decreases, its price rises.

Market makers use the order book to manage their positions and adjust their prices accordingly. The order book contains a record of all buy and sell orders for a particular currency pair. Market makers monitor the order book to gauge supply and demand levels and adjust their prices to stay competitive.

Market makers can influence currency prices by adjusting their bid and ask prices in response to changes in supply and demand or to manage their own positions. For example, if a market maker accumulates a large position in a particular currency, they may adjust their prices to encourage more selling (if they want to reduce their position) or more buying (if they want to increase their position). Additionally, market makers may collaborate with other market participants to coordinate trading activity and influence prices.

Love it

stevetrade posted:
In the currency markets, market makers facilitate trading by providing liquidity. They do this by constantly offering to buy or sell currencies at publicly quoted prices. Market makers make money through the bid-ask spread—the difference between the buying and selling prices.

Supply and demand dynamics determine the prices at which market makers are willing to buy and sell currencies. When demand for a currency increases, its price rises; when demand decreases, its price falls. Similarly, when the supply of a currency increases, its price falls; when supply decreases, its price rises.

Market makers use the order book to manage their positions and adjust their prices accordingly. The order book contains a record of all buy and sell orders for a particular currency pair. Market makers monitor the order book to gauge supply and demand levels and adjust their prices to stay competitive.

Market makers can influence currency prices by adjusting their bid and ask prices in response to changes in supply and demand or to manage their own positions. For example, if a market maker accumulates a large position in a particular currency, they may adjust their prices to encourage more selling (if they want to reduce their position) or more buying (if they want to increase their position). Additionally, market makers may collaborate with other market participants to coordinate trading activity and influence prices.

Thanks!