Let’s define what fiscal policy really is.
Fiscal policy is the government’s approach to managing its budget and spending to achieve specific economic goals.
Goals such as:
How exactly?
Through taxes.
Now luckily I can tell you directly that this is a less relevant component of factors that drive FX, but when it is relevant, it’s EXTREMELY important.
In my last guide, I covered the sovereign debt crisis of the ‘mini budget’ which nearly caused a global bond market frenzy.
I’ve linked the case study here for reference.