Movement of currency pairs' graphics in the Forex market is determined by a number of the macroeconomic parameters, current and prospective political events, and also rumor and the expectations of the next official statistical data about a condition of economy.

Comprehension and estimation of all these factors is the fundamental analysis, which is used by analysts and traders of the Forex market to estimate and the forecast movement of this or that currency pair.

In this article we are going to tell you about one of components of the fundamental analysis - influence of political events on the Forex market.

It is necessary to note that almost every significant political event always is connected with economy, and its influence can render both positive and negative influence on a condition of this or that national currency.

The ability of estimating the influence of current political situation and forecasting its development is the great part of trader's mastery. If he correctly interprets a political situation, skillfully uses fundamental factors, and isn't influenced by the general agiotage and rumors around different events, his forecasts will be exact.

It's much easier to predict reaction of the market to expected political events (elections of leaders of the states, elections of parliaments, acceptance of budgets, large interstate contracts and other), than to unexpected ones (terrorism, wars, etc.).

An experienced analyst clearly understands what the reaction to a planned political event is going to be. For example, forthcoming elections of the large influential state's president always come to an end with the election of one of the applicants for this post.

 And, here all depends on the position of the new state's leader about politics and economics, factors which influence movement of the market. But, as a rule, during pre-election campaign, applicants for a post of the president represent their political programs. So, all people can get acquainted with views of all candidates. In this case the reaction of the market is rather predictable.

It is much more difficult to determine movement of the Forex market reacting to unexpected political news. In such situations there is no time for preparation and the analysis of a situation. All happens quickly, and is quite unexpected. In such cases in quiet market the suddenly begins a storm, accompanied by a collapse or unexpected rise of this or that currency, which was not provided by any fundamental factors. And the reason of a storm in the market may be caused, for example, by revolution in one of oil-producing countries. Reaction of the market will be extremely rapid.

There are no strict requirements for traders how to act in such cases. But constant following events in problem regions, the analysis of the situation, should minimize consequences from such spontaneous political surprises. As we see, political events play the major role at the currency market, and the fast reaction, based on the careful analysis, can not only reduce a degree of risk, but also make a profit.