INCREASE IN GDP
GDP (Gross Domestic Product) growth experienced by a country in a given period of time, is a crucial variable in the fundamental analysis either in periods of economic expansion with an increase in consumption, or during a contraction where premium savings in people. In principle, higher projected GDP will push the price of the country’s currency to rise, while a smaller number will cause a decrease in the value of the currency.
BALANCE OF PAYMENTS
The Balance of trade a country measures the difference between the value of goods and services that a country exports, next to the price of goods and services that matter. A country with a trade deficit will experience a reduction in booking their currencies causing a decrease in the price of its currency and incidentally, making its exports more affordable abroad but more expensive imports.
THE IMPACT OF INFLATION
Inflation highly effects the forex market as the appreciation or depreciation of a currency against another is offset by a change in the differential of the interest rate. This means that currencies with higher interest rates than are appreciated about their par product containment expectations of future inflation and higher returns offered to investors. Thus, a higher inflation figure what the market expects will drive the exchange rate upward, while if the opposite is the currency will weaken.
JOB/UNEMPLOYMENT
The unemployment situation or jobless rate measures the strength of the labor market. In countries where much of the economic activity is based on the consumption Internal- as in US where 80% of its expansion responds to the consumption of goods and services, the employment indicator is vital to ascertain the state of health of economic activity. Thus, negative figures showing a deterioration of the labor market adversely affect the price of the currency, while positive data the opposite effect.
GDP (Gross Domestic Product) growth experienced by a country in a given period of time, is a crucial variable in the fundamental analysis either in periods of economic expansion with an increase in consumption, or during a contraction where premium savings in people. In principle, higher projected GDP will push the price of the country’s currency to rise, while a smaller number will cause a decrease in the value of the currency.
BALANCE OF PAYMENTS
The Balance of trade a country measures the difference between the value of goods and services that a country exports, next to the price of goods and services that matter. A country with a trade deficit will experience a reduction in booking their currencies causing a decrease in the price of its currency and incidentally, making its exports more affordable abroad but more expensive imports.
THE IMPACT OF INFLATION
Inflation highly effects the forex market as the appreciation or depreciation of a currency against another is offset by a change in the differential of the interest rate. This means that currencies with higher interest rates than are appreciated about their par product containment expectations of future inflation and higher returns offered to investors. Thus, a higher inflation figure what the market expects will drive the exchange rate upward, while if the opposite is the currency will weaken.
JOB/UNEMPLOYMENT
The unemployment situation or jobless rate measures the strength of the labor market. In countries where much of the economic activity is based on the consumption Internal- as in US where 80% of its expansion responds to the consumption of goods and services, the employment indicator is vital to ascertain the state of health of economic activity. Thus, negative figures showing a deterioration of the labor market adversely affect the price of the currency, while positive data the opposite effect.
