Foreign currency exchange rates (also known as Forex), are influenced by an array of political and economic factors relating to the difference in value of a currency or economic region, such as the euro (EUR) in relation of another country's or economic region's currency, such as the United States dollar (USD).
The main factors affecting currency exchange rates are the terms of trade, political stability and overall economic performance between the two countries or regions. This also refers to their economic growth (for example GDP growth rate), economic health, interest rates, inflation rates and balance of payments (i.e. exports, imports, and government debt).
The United States Non-Farm Payrolls report (NFP) is an example of a major economic event that is related to Forex. The NFP typically affects the following currency exchange rates: EUR/USD, GBP/USD, and USD/JPY.