Forex Fundamental Analysis
The forex fundamental analyst studies the economic, social and political forces that demand and supply of a currency of a country or zone can influence. Fundamental analysts tend to look at macroeconomic indicators, such as economic growth rates, interest rates, inflation rates and unemployment figures to decide whether a currency will appreciate or depreciate in the long (er) term.
The general idea behind forex mentel fundamental analysis is that the value of a currency will appreciate When the economy is doing well and, secondly, will depreciate when the economy is doing badly.
Why? If the economy does better, then interest rates rise to keep inflation under control and higher interest rates usually results in a revaluation of the currency of that country or zone.
Forex Fundamental Analysis In Practice
A. ECONOMIC DATA
A stream of economic data is published weekly on a regular basis that may be important for both fundamental as Day-traders forex traders. Is the published data "much" better or worse than the market forecast, there will usually place a movement in exchange rates.
How do we know when economic data is published?
These can be found on a forex economic calendar. (more on this in the next lesson)
B. IMPORTANT SPEECHES
Speeches by some people can affect currencies. The who and when is also reflected in the forex economic calendar. Key people include, the President of the ECB, the chairman of the Federal Reserve (FED), ...
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