- The Role of Central Banks
- News that Matters
- Analisa Fundamental - Belajar Forex Trading Syariah
- Analisa Fundamental - Belajar Forex Trading Syariah [3no7eekj6yld]
It can be used to predict the performance of more important lagging indicators and to assess the immediate direction of an economy. Revisions to advanced reports of retail sales can cause significant volatility. The retail sales report can be compared to the sales activity of a publicly-traded company.
This report shows a change in the production of factories, mines, and utilities within a nation. It also reports their " capacity utilization ," the degree to which each factory's capacity is being used.
The Role of Central Banks
It is ideal for a nation to see a production increase while being at its maximum or near-maximum capacity utilization. Traders using this indicator are usually concerned with utility production, which can be extremely volatile since the utility industry, and in turn, the trading of and demand for energy is heavily affected by changes in weather. Significant revisions between reports can be caused by weather changes, which in turn can cause volatility in the nation's currency.
The CPI measures change in the prices of consumer goods across over different categories. This report, when compared to a nation's exports, can be used to see if a country is making or losing money on its products and services. Be careful, however, to monitor the exports — it is a popular focus with many traders because the prices of exports often change relative to a currency's strength or weakness. And don't forget the many privately issued reports, the most famous of which is the Michigan Consumer Confidence Survey.
All of these provide a valuable resource to traders if used properly. Since economic indicators gauge a country's economic state, changes in the conditions reported will therefore directly affect the price and volume of a country's currency. It is important to keep in mind, however, that the indicators discussed above are not the only things that affect a currency's price. Third-party reports, technical factors, and many other things also can drastically affect a currency's valuation. When conducting fundamental analysis in the forex market :.
There are many economic indicators, and even more private reports, that can be used to evaluate forex fundamentals. It's important to take the time to not only look at the numbers but also understand what they mean and how they affect a nation's economy. When properly used, these indicators can be an invaluable resource for any currency trader. Your Privacy Rights. To change or withdraw your consent choices for Investopedia. At any time, you can update your settings through the "EU Privacy" link at the bottom of any page. These choices will be signaled globally to our partners and will not affect browsing data.
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News that Matters
Retail Sales Definition Retail sales tracks consumer demand for finished goods by measuring the purchases of durable and non-durable goods over a defined period of time. Jobs Growth Jobs growth is a figure measured by the Bureau of Labor Statistics BLS that tracks how many jobs are created in the country on a monthly basis. It's during these times that marketing volatility is high and care should be taken with existing and new trade positions.
Los Angeles Hawks vs. Tonight's match puts the L. Hawks up against the N. You're in for a treat. Wait, what?! Whoops sorry, wrong subject. We really just meant hawks versus doves, central bank hawks versus central bank doves that is. Central bankers can be viewed as either hawkish or dovish, depending on how they approach certain economic situations. Central bankers are described as "hawkish" when they are in support of the raising of interest rates to fight inflation, even to the detriment of economic growth and employment.
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For example, "The Bank of England suggests the existence of a threat of high inflation. Dovish central bankers, on the other hand, generally favor economic growth and employment over tightening interest rates. They also tend to have a more non-aggressive stance or viewpoint regarding a specific economic event or action. And the winner is It's a tie! Well, sort of. You'll find many a banker "on the fence", exhibiting both hawkish and dovish tendencies. However, true colors tend to shine when extreme market conditions occur. Long-term Market Movers There are several fundamentals that help shape the long term strength or weakness of the major currencies.
We've included what we think are the most important, for your reading pleasure: Economic Growth and Outlook We start easy with the economy and outlook held by consumers, businesses and the governments. It's easy to understand that when consumers perceive a strong economy, they feel happy and safe, and they spend money. Companies willingly take this money and say, "Hey, we're making money! And all this creates some healthy tax revenue for the government.
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They jump on board and also start spending money. Now everybody is spending, and this tends to have a positive effect on the economy.
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But you get the idea. Both positive and negative economic outlooks can have a direct effect on the currency markets. Capital Flows Globalization, technology advances and the internet have all contributed to the ease of investing your money virtually anywhere in the world, regardless of where you call home. You're only a few clicks of the mouse away or a phone call for you folks living in the Jurassic era of the 's from investing in the New York or London Stock exchange, trading the Nikkei or Hang Seng index, or from opening a forex account to trade U.
Capital flows measure the amount of money flowing into and out of a country or economy because of capital investment purchasing and selling. The important thing you want to keep track of is capital flow balance, which can be positive or negative. When a country has a positive capital flow balance, foreign investments coming into the country are greater than investments heading out of the country.
A negative capital flow balance is the direct opposite. Investments leaving the country for some foreign destination are greater than investments coming in. With more investment coming into a country, demand increases for that country's currency as foreign investors have to sell their currency in order to buy the local currency. This demand causes the currency to increase in value.
Simple supply and demand. And you guessed it, if supply is high for a currency or demand is weak , the currency tends to lose value. When foreign investments make an about-face, and domestic investors also wants to switch teams and leave, and then you have an abundance of the local currency as everybody is selling and buying the currency of whatever foreign country or economy they're investing in.
Foreign capital love nothing more than a country with high interest rates and strong economic growth. If a country also has a growing domestic financial market, even better! A booming stock market, high interest rates What's not to love?! Foreign investment comes streaming in. And again, as demand for the local currency increases, so does its value. Countries sell their own goods to countries that want them exporting , while at the same time buying goods they want from other countries importing.
Have a look around your house. Most of the stuff electronics, clothing, doggie toys lying around are probably made outside of the country you live in. Every time you buy something, you have to give up some of your hard-earned cash.
Whoever you buy your widget from has to do the same thing. And Chinese imports exchange money with European exporters when they buy goods. All this buying and selling is accompanied by the exchange of money, which in turn changes the flow of currency into and out of a country. Trade balance or balance of trade or net exports measures the ratio of exports to imports for a given economy.
It demonstrates the demand of that country's good and services, and ultimately it's currency as well.