How does one analyse trends and prices for Exchange rates? I would imagine they are more politcally affected than normal stocks...true false?

I'm not going to be able to give an expert answer here, but judging by the articles on the Currency section of the main site, two particular issues appear to be inflation rates at the national level, and also the amount of currency held in reserve by national banks across the world.

Interest rates are a key concern. It's going to be interesting to see what happens if the Bank of Japan moves from zero late later this year.

Just think of all that 0% interest cash that's flowed out from Japan, reinvested abroad in property with 50%-100% inflation. Quite an investment for those well-connected enough to invest at that level.

The real situation is that prediction of which way currency rates are going is not possible. What is possible is to base predictions on trends and other information about the national and world economy and act on those predictions. The clever and experienced traders make money because they are right (and have more money exposed in winning trades) more often than they are wrong (and they cut their losses decisively when the market goes against them).
It is also possible to use a hedging system because 10 years of statistics show that some currency pairs react opposite to each other with a high correlation factor. By taking advantage of this, it is possible to trade without knowing which way the rates are going, since one is hedging the other. This can be combined with a system of limit orders where small positions are purchased when the rate goes down to the limit set (or opposite when the rate goes up). Over time, this works to structure the activity to buy low and sell high. Also, do not forget that it is possible to get a net interest on the account money going all the way up to 50% per year and more, depending on how the account is set up (not considering any trading profit or loss).
I am using such a system myself and it is working extremely well.
Knut

It's all about leverage when investing with forex. Many people use too much, and that leads to their downfall. Try to use no more than 5:1 leverage when trading Forex.