FX Mechanics in forex
FX mechanics is the plumbing of the currency market: why a pair is always one currency priced in another, what actually moves an exchange rate, and how interest-rate differentials and capital flows feed through to price.
These guides build the mental model that the rest of fundamental analysis sits on, so the data and the central banks make sense in context.
Guides
2 in-depth guides on fx mechanics.
Why a Currency Pair Is Always a Relative Price
There is no such thing as the dollar going up on its own. A currency only has a price relative to another currency, so every pair is a tug-of-war between two economies. Here is what that mental model changes about how you trade.
The Anatomy of a Rate Differential
Capital flows toward the higher yield, so the interest-rate gap between two economies is the single biggest force behind a pair. Here is how to take that gap apart: nominal versus real, spot versus expected, and the moment it breaks.