As the largest, busiest and most liquid trading and investment platform in the world, the forex market is sensitive to geopolitical events. Some forex traders prefer to take positions according to technical analysis while others stick with fundamentals, but both will take into account global news headlines, particularly as they apply to the economic and monetary policy.
News about tax cuts and other policy moves that can impact sovereign revenue will certainly have an effect on the forex market, but it is important to understand the context of the reports. When tax cuts are enacted by major economies, there should be an understanding that treasury revenue will decrease, and this could either be interpreted as good or bad news for the economy. Before getting into the details of national revenue, tax cuts and their effect on the forex market, it is crucial to understand how headlines and reports by analysts work.