Intermediate · Lesson 8 of 11 · 7 min read
What moves each market
Forex, gold, stock indices and crypto all react to different things. Knowing what drives a market helps you understand its big moves and avoid trading blind into news.
The big idea: money moves to where it is paid best
Most big moves come back to interest rates, growth and mood. When a country’s interest rates are expected to rise, its currency usually becomes more attractive. When investors feel confident (“risk-on”), they buy shares and crypto. When they are worried (“risk-off”), they often move into safer places such as gold, the US dollar, the Japanese yen or the Swiss franc.
It is not the news itself that moves price, it is the surprise. A result that matches what everyone expected often moves price very little.
What drives each market
| Market | Main drivers | Busiest times (UK) |
|---|---|---|
| Forex (e.g. EURUSD, GBPUSD) | Interest rate decisions, inflation (CPI), jobs reports, central bank speeches, risk mood | London 8am to 5pm, busiest when New York joins (1pm to 5pm) |
| Gold (XAUUSD) | The US dollar, US interest rates, inflation, fear and uncertainty | London and New York sessions, and big US news |
| Indices (US30, SPX500, NAS100) | Company earnings, interest rates, economic growth, risk mood | From the US open at 2:30pm |
| Crypto (BTCUSD, ETHUSD) | Risk mood, regulation news, big buyers and sellers, wider tech shares | Trades every day, including weekends, often with sharp moves |
Times shift by an hour for a few weeks each year when the UK and US change their clocks on different dates.
The news that matters most
Interest rate decisions from the US Federal Reserve, the Bank of England and the European Central Bank. Inflation (CPI) figures. The US jobs report (non-farm payrolls), usually on the first Friday of the month. These can move markets by more in a minute than in a normal hour, and spreads often widen around them.
US inflation comes out higher than expected. Traders expect US interest rates to stay higher for longer, so the US dollar rises. Gold, which is priced in dollars and pays no interest, often falls. US stock indices may drop as borrowing stays expensive.
The same release, three markets, three reactions, all within seconds. This is why many beginners simply avoid opening trades just before big news.
Markets move together
Some markets often move alike: EURUSD and GBPUSD both against the US dollar, or the three US indices. Buying several of them at once can feel like spreading risk, but it can really be the same trade several times. Count them as one when you work out your risk.
Common mistakes
- Opening a trade a minute before big news “to catch the move”.
- Thinking good news must make price go up: it depends on what was expected.
- Holding five similar trades and calling it diversification.
- Trading crypto at the weekend without remembering the rest of the market is closed and moves can be sharp.
Check yourself
1. A jobs report comes out exactly as expected. What usually happens to price?
Often very little, because there is no surprise.
2. Investors are worried and “risk-off”. Where does money often go?
Into safer places such as gold, the US dollar, the yen or the Swiss franc.
3. You buy EURUSD and GBPUSD at the same time. Why might your risk be higher than you think?
Both move against the US dollar, so they often move together: it can be like one bigger trade.
Try it on BTM
For education only, not financial advice. Trading carries a high risk of losing money, especially with leverage. Only trade with money you can afford to lose.
For educational purposes only. Nothing here is financial advice. Past performance does not guarantee future results, and trading carries a high risk of losing money, so only trade with money you can afford to lose. Read the risk warning.