FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

The ISM Manufacturing Survey is based on comments from purchasing managers in the manufacturing sector. It’s the first piece of news on the economy every month and provides the earliest clues of how the economy has fared during the previous four weeks. Why is it considered important? People in charge of buying stuff for their company are called purchasing managers. Manufacturing companies need supplies to make products. A sample of items they might order includes cables, packing boxes, and

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Consumer Confidence is a survey of consumer attitudes concerning both the present situation as well as expectations regarding economic conditions conducted by The Conference Board. Five thousand consumers across the country are surveyed each month. The level of consumer confidence is directly related to the strength of consumer spending. Consumer confidence and consumer sentiment are two ways of talking about consumer attitudes. Among economic reports, consumer sentiment refers to the Michigan

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Consumer spending makes up a whooping 70% of all US economic activity. Retail sales account for one-third of that. If consumers keep spending, it’s a sign of overall economic growth. To monitor such expenditures, the Census Bureau calls thousands of retailers each month for their latest sales numbers. As a result, we can see the retail sales report as one of the best indicators of change in consumer spending patterns. But retail sales also has certain shortcomings. It only represents spending

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

by Brian Twomey The monthly  economic release  covering Germany's employment figures is called the German ILO. ILO is an acronym for the International Labor Organization, a specialized agency of the United Nations that has sought, since its founding and adoption by the Treaty of Versailles in 1919, to promote social justice, human rights and decent working conditions. The world adopted the ILO as a specialized agency of the League of Nations to keep peace and avoid social unrest in

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

by Richard Lee The foundation of any economy is its manufacturing sector. That's why the market is always aware and focused on the Institute of Supply Management's (ISM) manufacturing surveys . This is particularly true in the case of the United States - where the sector contributes roughly 12% of U.S. overall economic growth. Although the survey's impact on the market is a bit less than some other reports - such as the non-farm payrolls and consumer price index - it still offers some support

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Like any business, a country has to keep track of its inflow and outflow of goods, services, and payments. At the end of any given period, every country has to look at its own "bottom line" and add up all international trade and investments. The narrowest measure of a country’s trade, the merchandise trade balance only counts “visible� goods such cars, food, and computers. This measure is often referred to in the press as the “trade balance� even though it actually includes only tangible goods

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

by Arthur Pinkasovitch Inflation, the rate of change in prices for a basket of goods and services, is one of the most anticipated indicators to gauge the overall health of an economy. A low and stable rate of inflation is most often found in healthy growing economies with proper monetary policies. On the other hand, runaway inflationary environments significantly reduce the purchasing power of individuals' savings while deflation is indicative of an economic slow down. Economists and policy

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

What is the PPI? What does it measure? The Producer Price Index (PPI) measures the rate of inflation experienced by manufacturers. The reading represents the monthly change in the average price of a fixed basket of goods purchased by manufacturers. Higher inflation generally leads to higher interest rates, which tends to strengthen the country's currency. It sounds like CPI, what's the difference? PPI is an index of commodity prices. In contrast, the CPI measures the prices of both commodities

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Since US CPI just got released, I thought it would a great idea to discuss exactly what CPI is and how it relates to forex. I've organized today's post in a question-and-answer format. I've provided two different versions of answer. The second answer or "street" answer are for those who like to keep it real. What is the CPI? What does it measure? Formal answer: The CPI is a measure of the change over time in the prices paid by consumers for a market basket of goods and services. Street answer:

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

by Investopedia Staff With buyers and sellers from all corners of the globe participating in trillions of dollars of trades each and every day, the forex market is a true global marketplace. The fact that foreign exchange trading has become such a globalized activity means that macroeconomic events play an even greater role in forex than ever before. Here we will discuss some economic trends and events that those new to forex should be aware of. (For more information, check out our 

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

by Sham Gad Foreign exchange (forex) traders are always looking for  trends  and economic outlooks to predict the potential movement in a  currency . Some look at economic reports or  GDP , or trade relations, but you might be able to predict these reports using the  equity markets . Equity markets have thousands of firms around the world producing hundreds of reports every day that can be a useful source of information for currency traders. (To learn more about forex

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

This article written by Elaine Kub was originally published in the June 2011 issue of SFO Magazine. Elaine Kub is a market adviser with the Agricultural Risk Consulting Group LLC. If you could only look at one piece of information before making a grain trade one day, what piece of information would that be? Your best bet is the U.S. dollar index. There are a number of reasons why it makes sense for agriculture commodity futures to respond to movements in the dollar, and it’s impressive how

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

The Role of Consumer Confidence in Markets and Economics If consumer confidence is up, that makes for a nice, easy, creampuff headline such as: “Consumers Gain Confidence Last Month.� But what does that really mean? Should financial markets pay attention to what consumers tell pollsters or fill out in a survey? After all, is it not what consumers actually do rather than what they say, which ultimately affects the economy? In discussing various economic indicators, economists often make a

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Everybody talks about “Quantitative Easingâ€�, “capital injectionsâ€� or “assets purchase programâ€�...  These are probably some of the most used terms you have read in the financial media lately. But what do they really mean? And what are the implications of such process? In this article we explain what it is, how it works and if it really works. What is Quantitative Easing? The main monetary policy measure used to boost an economy is lowering interest rates. By doing that, central banks try

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

This article is taken from the YourTradingEdge magazine (JAN/FEB 2011 issue). The author, Wayne McDonell , is a professional FOREX trader with an Entrepreneurial spirit and a business leader's mind. He trades his own funds and trains others how to do so consistently and profitably by coaching them everyday... in the live FOREX markets. Wayne McDonell provides analysis of the currency market: supply and demand. To be a truly successful currency trader one must understand global money flow well.

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

This article written by Boris Schlossberg was originally published in the September 2010 issue of SFO Magazine. Boris Schlossberg is the co-head of trading at BK Forex Advisors and serves as director of research at FX360. Schlossberg is also a regular contributor to the free e-newsletter SFO Weekly. Check out a free FX session-based breakout strategy report from Schlossberg. Whenever I hold a seminar in some hotel room across the world bombarding the crowd with slide upon slide of economic

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Here are some milestones in the JPY's 138-year history from 1871 until 2010: 1871 - JPY becomes Japan's currency as part of the Meiji Restoration, which marked the start of Japan's modernisation and opening to the rest of the world. Japan adopts the gold standard. 1949 - After World War II the USD's fixed rate is set at JPY360 via the Bretton Woods system, partly to help stabilise prices in the Japanese economy. 1959 - The USD/JPY exchange rate is liberalised. The margin of fluctuation is set

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

There are many games to try your luck but definitely forex trading is not a game of chance. We therefore always advise our clients to at least gain a basic understanding of the Forex market and what influences the prices of different currency pairs before they start trading. In general, fluctuations in exchange rates are caused by Fundamental and/or Technical factors. In this article we outline the basic fundamental considerations. Political conditions Actual monetary flows (flows for imports,

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Each month the Office of National Statistics (ONS) reports the UK trade balance. This is a very important economic indicator in London. Essentially the UK trade balance measures the difference between the value of exports and imports in the UK, and is shown in billions of Pounds. This economic figure compares the UK trade activity with the rest of the world, and evaluates it in three categories: Goods only, Services only, and Goods and Services.

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

The Reserve Bank of New Zealand (RBNZ) differs from many of the central banks in the West, such as the US or UK. The RBNZ is not completely independent, meaning it is still in part tied to the New Zealand Government. Due to this fact, the RBNZ can only change monetary policy under the Policy Target Agreement (PTA). The PTA states that the inflation target must be negotiated between the government and the RBNZ. Currently the PTA states that that inflation should fall between a 1-3% target

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Each month Statistics New Zealand releases the trade balance figure. This is a very important economic indicator in Wellington, and the rest of New Zealand. Essentially the New Zealand trade balance measures the difference between the value of exports and imports, and is shown in millions of New Zealand Dollars. This economic figure is used to compare the NZ trade activity with the rest of the world.

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Each month in Washington DC, the Bureau of Economic Analysis releases the trade balance figure. The US trade balance measures the monetary difference between the value of exports and imports. A surplus exists when the value of exports exceeds the value of imports. On the other hand, a deficit exists when the value of imports is greater than exports. This figure is calculated in billions of US dollars.

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Each month in Munich, the IFO Institute for Economic Research releases the IFO business climate survey. This is one of the most important economic figures for many Forex traders. The IFO Report is a figure that measures the results of 7,000 questionnaires completed by major German companies. The report measures the sentiment of the current and near future business climates. German companies have three options for responses when filling out the current business climate section of this survey;

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

The broad index measuring the overall activity of the European economy is called the Economic Sentimental Indicator (ESI). It is released each month by the Directorate General for Economic and Financial Affairs of the European Commission. The ESI gives three separate economic figures each covering different economic, geographic, and political entities. There is one statistic for every member of the European Union, one for the overall European Union, and one for the Euro Zone. Every 3-4 years,

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Whereas in the US the Central Bank is the Federal Reserve, in the UK the prevailing Central Bank is called the Bank of England (BOE). Since 1997, when the BOE gained complete independence from the government, the BOE has had full control over UK monetary policy. For two days each month the BOE’s Monetary Policy Committee (MPC) meets in an effort to keep inflation at a target level of 2%. The meetings are held to set the overnight interest rate, and the future course of this rate. The Monetary

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

The European Central Bank has complete control over monetary policy over the thirteen member states in the Euro Zone. Twice each month, the ECB Governing Council meets in an effort to keep inflation at the target levels. During this time they set the Euro Zone overnight interest rate. The European Central Bank Governing Council consists of two primary bodies: The Executive Board: President Vice President Four additional members Governors of all national banks of the thirteen Euro Zone

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

The Germany trade balance is an economic figure calculated monthly in Wiesbaden by the German Federal Statistics Office and represents the difference between the value of exports and imports in Germany. A trade surplus is created when the value of exports exceeds the value of imports; and vice versa.

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Much like the US Federal Reserve Bank, The Reserve Bank of Australia (RBA) is the central financial authority responsible for all aspects of the Australian Monetary policy. The RBA Board meets eleven times each year on the first Tuesday of each month (expect January) in an effort to combat inflation, fertilize the general growth of the Australian economy, and set the overnight interest rate. RBA BOARD The Reserve Bank Board comprises eight members beside the secretary of the treasury: Governor

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

The Australia Trade Balance is a crucial economic indicator released monthly in Canberra by the Australian Bauru of Statistics (ABS). The trade balance figure is simply the difference between the amount of export and imports of Australian goods and services for the reported month with Australia and other foreign trade partners. A trade surplus is created when the value of net exports exceeds the value of net imports; and vice versa.

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

The Japan trade balance is an important economic indicator which is released monthly in Tokyo by the Ministry of Finance. This crucial piece of data represents the disparity between the net value of exports and imports in Japan for a given period of time. A trade surplus is created when the value of exports exceeds the value of imports and vice versa.

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Before the decision: buy the rumors and sell the new strategy: If the market expects the Fed to increase rates, Forex traders may benefit by buying the US dollar before the announcement and squaring their position right after the decision is announced. If the market expects the Fed to cut interest rate, perform the opposite. After the decision: Surprise strategy If the Fed decision matches expectations, Forex traders may want to consider remaining on the sidelines. If the Fed cuts interest

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

The Federal Reserve System (Fed) was created to "promote effectively the goals of maximum employment, stable price, and moderate long term interest rate". In order to do this, the Federal Open Market Committee (FOMC) has been established and meets 8 times every year to set the future course of the overnight interest rate. Unlike other central banks around the world, the Fed does not possess an explicit quantifiable inflation target. This has led to the Fed being vastly criticized by many

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

The Swiss Trade is a crucial economic figure released monthly by the Swiss National Bank (SNB). The publication, which is calculated in billions of Swiss Franc, serves as a preliminary estimate of Switzerland's international trade in goods and services on a balance of payment basis as well as merchandise import and export statistics on a recorded basis. A trade deficient is created when the value of imports exceeds the value of exports, conversely, when the value of exports exceeds the value of

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

The ZEW Survey is published monthly by the Center for European Economic Research and is one of the most powerful economic indicators that have a profound impact on the European currency. The ZEW indicator is a sentimental piece of data utilized to measure investor confidence in the German and European economy. The Survey allows for up to 350 analysts and experts to participate via their opinions concerning the current and future economic state of Germany and Europe as a whole. The survey

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

Taking a fundamental approach to investing can be applied to the Forex market in the same way it is utilized in the Stock market. Because currencies, or more specifically the countries of the currencies in question, are affected by economic events just as stocks are, the Forex trader is able to look for a relative value among various currencies. A fundamental approach to Forex involves analyzing the relative strength and weakness of each currency along with an evaluation of where the specific

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

This article is taken from the Trader's Journal magazine (May 2009 issue) The author, John Mauldin , is Millennium Wave Investments president and a recognized expert and leader on investment issues; he is primarily involved in private money management, financial services and investments. John is a prolific author, writer and editor of the popular “Thoughts from the Frontline� e-letter that goes to over 1,000,000 readers weekly, and is posted on numerous independent websites. He is a frequent

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

This Data Point Release tracks Total U.S. Inventories and Business Sales, and is released approximately Six Weeks after the Reporting Month’s End at 14:00 GMT. Offered by The Census Bureau, the Release gives a comprehensive Indication of Overall Economic Health concerning Current Cycle Conditions and acts as a Barometer of possible Futures Conditions as well. The Report is comprised of Three Data Sets: TOTAL BUSINESS SALES: Since most Sales Data for the Reporting Month has already been

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

This Data Point is the First Data Point Release of the Month concerning Consumer Spending. The Data is released approximately Two Weeks after Month’s End at 12:30 GMT. Traders are interested in this Data, as it functions as a Barometer of overall Consumer Health, Confidence, and Spending of the previous Month in the current Economic Climate. Revisions to this Data Month-over-Month can be quite significant, as Consumer Spending represents about 75% of the overall underlying, and in this case,

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

This Data Point largely measures the Level of Inflation in Goods and Services EXCLUDING Food and Energy within the Economy. The Data is released approximately Mid-Month after The Coverage Month that the Data analyzes. Released at approximately 12:30 GMT, The Data is simultaneously released with the Comprehensive CPI Data Point, which includes Food and Energy. Core CPI is one of the most Crucial Data Points each month due to Core Inflationary concerns. Inflation affects the Consumer directly in

FXstreet.com: Education: Fundamental Analysis
FXstreet.com: Education: Fundamental Analysis. Useful resources for traders that want to explore the use and/or integration of economics in their market analysis.

This Data Point largely measures the Average Change in Sale Prices received by the Domestic Producers of Goods and Services EXCLUDING Food and Energy within the Economy. The Indices that make up The Index measure Prices Changes from the Selling Perspective, and the Data is released approximately Mid-Month after The Coverage Month that the Data analyzes. Released at approximately 12:30 GMT, The Data is simultaneously released with the Comprehensive PPI Data Point, which includes Food and