Economic indicators of fundamental analysis |
Despite the popularity of technical analysis techniques, fundamental analysis cannot be underestimated. We understand how difficult it is to follow almost every minute of the economic, political and social spheres of the countries of the world. Therefore, we suggest that you identify only the most basic economic indicators, which for sure may be, if not of primary importance for making a trading decision, but at least insuring.
Discount rate. In fact, this is the value of the national currency set by the Central Bank. That is, the rate at which commercial banks receive funding. Its increase can have different consequences depending on other indicators and time frames. Has a strong influence. Besides the discount rate, weaker indicators are interest and discount rates.
GDP report. It represents data on all goods and services that were produced in the country by both domestic producers and foreign investors during the reporting period. The indicator is calculated, for example, in the USA on a quarterly basis with the possibility of subsequent revision of the information. The impact on the exchange rate is direct and high, since a positive trend and a sharp jump are instantly reflected in the movement of the exchange rate.
Consumer price index. Displays the degree of depreciation of the national currency. The comparative basket includes goods and services that are of the greatest importance in the life of the population (food, fuel, household items, etc.). The impact on exchange rate currencies is strong. If this index exceeds the standard indicators (moderate inflation is considered positive for the economy), this indicates problems in the country.
Producer price index. Displays the percentage change in prices for goods produced by national producers, covering all stages of production. Published monthly, has a weak impact on the foreign exchange market, since it does not fully reflect the entire situation in the economy. For example, the service sector is not included in this indicator.
Trade balance. Indicator with a strong influence on the exchange rate. The ratio of imports and exports, as well as the budget deficit, directly form the value of the national currency. Published monthly in the USA.
Unemployment rate. One of the most influential indicators for developed countries. For countries with economies in transition, this indicator may be ineffective, since it will not reflect the real situation of shadow business.
Business activity index. Has a medium impact on the market. The monthly published indicator is formed by a competent research center based on the results of a survey of professional workers in the industrial sector.
Now you know some of the most important economic indicators. Thanks to them, you will be able to make a more balanced decision during the transaction, which means you can get even more profit. Stay with us and read our next publications!