Complete Guide for Fundamental Analysis
1.Fundamental Analysis
This analysis is interested in the ‘why’ – why is a forex market reacting the way it does? Forex and currencies are affected by many reasons, including a country’s economic strength, political and social factors, and market sentiment.
The biggest fundamental analysis indicators
1.News and Economic Data
Investors and banks look for strong economies to place their funds, in the expectation that their capital will appreciate.This is because the currency of that country will be in demand as the outlook for the economy encourages more investment. Any news and economic reports which back this up will in turn see traders want to buy that country’s currency.
2.Central Bank and Government Policy
Central banks determine monetary policy, which means they control things like money supply and interest rates. The tools and policy types used will ultimately affect the supply and demand of their currencies. A government’s use of fiscal policy through spending or taxes to grow or slow the economy may also affect exchange rates.
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