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A little about the fundamental analysis
Most of it is clear that the formation of the market often occurs due to certain fundamental economic factors.These factors are strongly influenced by such things as the level of stability of the political system in the country, which, in turn, influence political leaders, the confrontation between different political forces, the level of development and participation in the political process of various public organizations. In other words, the interpenetration of economy and politics creates market trends and fluctuations, provides the market stability or volatility (volatility).The importance of understanding this process is paramount for any active market participant, was done as a long-term strategic investment action, and short-term postdinner agreement.
The foreign exchange market serves as a vivid illustration of the fact. In everyday practice trading any trader just have to take into account the diversity of daily and hourly occurring "external" factors.
Try to give a few illustrations "on a given topic".In developed countries, which, in fact, are the founders and main participants of the Forex market, a regular contributor, and sufficiently objective and comprehensive economic statistics are made public the key economic indicators. Such information directly or indirectly affects the exchange rate of the currency pairs. Focus on a few characteristic examples. Weekly, usually on Thursdays, in the United States publish figures on the number of registered at the labor exchange of citizens ' applications to receive unemployment benefits (Initial Claims, Unemployment Claims).If this important statistic is markedly improved, or is better than forecasted by analysts, as a rule, it provides significant support for the us dollar. By the way, has a significant impact on the market and the statistics from China is a relatively new, but very large and influential player." This effect may be indirect, for example, data regarding changes in the volume of the foreign trade balance of the PRC significantly affect the courses of Australian and new Zealand dollar.Everything is easy to explain, because the increase in exports from China leads to increased demand of Chinese manufacturers for the raw material, particularly from Australia and New Zealand that pushes their own currency up. Such indicators are many and the purpose of this material is not to describe them fully, or even partially. We just draw Your attention to the need to account for such factors in Your daily work. Their more comprehensive analysis, we will try to dedicate a separate publication.
Examples of "another story" is the reaction of the markets to the actions and statements of Central banks of key countries-participants of the market. A special place is occupied by decisions to change, or, conversely, the preservation of the basic interest rate or the refinancing rate. Is the interest rate at which financial institutions (mostly banks, mortgage funds, major lending institutions) will be able to borrow funds from "their" Central Bank. No need to explain that this affects the maintenance cost and the ease of attracting credit resources in the "real" economy.And here is impact on the rate of the national currency will be direct and immediate. Although there are indirect factors. For example, the change rate of the European Central Bank will not only change the course of Euro, but with almost 100% probability will cause a change in the rate of the British pound – the currency of a country that is the largest economic and trading partner of the Eurozone countries. And although, as a rule, here is a direct dependence, but sometimes the pound can ignore such interference, and sometimes change in the opposite direction to the change of the Euro.This will depend on the political situation, and from previous market dynamics, and comparative state of Affairs in the UK economy and the Eurozone.
Markets fluctuate significantly in response to performances of "PRB officials, first and foremost, this refers to the speeches of the head of the Federal Reserve and European Central Bank President. Experts and market participants attempt to understand and analyze the way forward these "regulators" of the market. You should carefully read and minutes of the meetings of Central banks, which strings can leak information about possible currency interventions, issues additional debt obligations –bonds, financial assets in the markets (so-called " quantitative "easing"), etc.
Finally, don't forget about the purely political at first glance events. For example, what took place in late October 2011 the EU summit produced a long-awaited deal with the problems of dangerous growth of external debts of the Eurozone countries. This was the basis for a sharp departure Euros upwards. And then there was the "showdown" in the Greek and Italian parliaments, which led to the resignations of local governments, unable to effectively solve its debt obligations.Response to such news was a significant depreciation of the single currency – and this despite earlier in the Eurosummit agreement. So sometimes the statements of top leaders of countries, or the results of the parliamentary hearings can provoke the strongest market shifts.
It is necessary to consider and political aspects of the functioning of world markets. For example, national holidays or weekends, the number of market participants and their operations falls sharply, making adjustments. There are also vnutricletocny the specifics of the Forex market. In one day sequentially opened and closed regional trading session, among which are the American, European and Asian. And each of them has its own peculiarities and nuances.
In conclusion I will add that almost all potentially significant events are on the page of our "Economic calendar". Follow him and you refer to other sources of information, not pulling events from a different "economic-political" context.
|Category: Forex | Added by: (29.10.2017)