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Forex Trading and the World Cup

Forex Trading and the World Cup

The football World Cup brings together countries all over the world. Since currency trading involves countries from around the world, it’s logical to think there would be some crossover. This notion is supported by market analysis and science. The World Cup has an impact on currency trading. How does this work?

The WC Effect

An analysis of previous World Cups shows that trading volume in a country with a team is significantly lower than that of another. As traders watch the game, 55% of trading volume in a country will decrease. Even in the US where football is called soccer and isn’t the most popular sport, trading volumes dipped by 43% while the US team was playing.

Qatar’s time zone is obviously ahead of Europe. This means that some of the games will take place during European trading hours while others will take place during US trading hours. At 15:00 British standard time, England will face Iran in the first game. Later in the day the US faces Wales at 14.00 New York time.

Future prediction

Based on past experiences, lower trading volumes during the World Cup usually translated into higher volatility. This is a very common…

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