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Fundamental analysis refers to the study of the core underlying elements that influence the economy of a particular entity. It is a method of study that attempts to predict price action and market trends by analyzing economic indicators, government policy and societal factors (to name just a few elements) within a business cycle framework. For forex traders, the fundamentals are everything that makes a country tick. From interest rates and central bank policy to natural disasters, the fundamentals are a dynamic mix of distinct plans, erratic behaviors and unforeseen events. Therefore, it is best to get a handle on the most influential contributors to this diverse mix than it is to formulate a comprehensive list of all "The Forex Fundamentals."
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Weekly Forex Fundamentals |
Written by Investica |
May 20 13 01:56 GMT
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Patience will be required this week before jumping on the bullish dollar bandwagon. The timing of this week's economic diary is very important and will have a clearly-defined market impact. The dollar is vulnerable for a correction until the end of Wednesday on event risk before the potential for fresh gains late in the week.
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Weekly Forex Fundamentals |
Written by Wells Fargo Securities |
May 18 13 14:29 GMT
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From the data released this week that covered a range of sectors, we had hoped to gain a clear idea of what lays ahead. However, we are left wondering just how these spring months will shape up.
The consumer is showing surprising strength, as absent inflationary pressures have helped stretch modest income growth. While some may balk at the modest 0.1 percent gain in headline retail sales in April, retail sales are reported in nominal terms. Retail gasoline prices fell 3.6 percent during the month, leading to a 4.7 percent drop in sales at gasoline stations. Stripping out gasoline station sales, retail sales increased 0.7 percent. Core sales increased for the sixth straight month in April, suggesting consumers have weathered the payroll tax hike fairly well. Job growth and constant declines in the unemployment rate through the year has likely reassured consumers that the domestic economy is stabilizing.
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Weekly Forex Fundamentals |
Written by TD Bank Financial Group |
May 18 13 06:05 GMT
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This week was heavily laden with economic data releases, both on the domestic and international front. It presented a rather mixed bag of reports for markets to digest. International data comprised of a slew of first-quarter GDP releases. The good news stories were largely constrained to the Asia-Pacific region. Japan's growth surprised the markets to the upside, coming in at 0.9% in 13Q1. These figures are on-par with Korea's earlier-reported growth in the January through March period, and served to boost regional sentiment. Much of last quarter's strength in Japan and Korea stems from a robust expansion in exports, which rose by an annualized 16% and 13%, respectively.
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Weekly Forex Fundamentals |
Written by Forex.com |
May 18 13 05:55 GMT
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The USD was the star performer last week, gaining against all of its G10 counterparts. The dollar index broke above 84.10 - a key resistance level - to the highest level since mid-2010. Interestingly, the dollar pushed higher even though there were some soft economic data points from the US last week including weaker inflation and initial jobless claims. The key driver of the stronger buck appears to have been some hawkish comments from Fed speakers. San Francisco Fed speaker John Williams and Charles Plosser both said that QE could end by 2014. Although Williams and Plosser are not voting members of the Fed this year, their comments still hold weight. Thus, a continuation of the dollar rally may rely on a pick-up in economic data to justify the shift in debate at the Fed regarding the end of QE3.
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Weekly Forex Fundamentals |
Written by Danske Bank |
May 17 13 13:37 GMT
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Japanese kick-start of the economy has succeeded - GDP growth jumped in Q1 and the outlook for coming quarters remains strong.
FOMC member is once again putting QE exit on the agenda, we expect tapering to start this year.
Swedish inflation data raise the risk of a rate cut in July.
Chinese recovery remains fragile and has lost momentum but so far no severe deceleration in growth.
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Weekly Forex Fundamentals |
Written by TD Bank Financial Group |
May 11 13 04:50 GMT
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It was another record-breaking week for the country's stock markets. A series of better-than-expected corporate earnings reports, strong trade data from China and expectations that the Federal Reserve is in no hurry to take away the punch bowl, helped to push both the Dow Jones and the S&P 500 to new highs. Although the markets lost some steam by the end of the week, both indexes were still 0.7% above last week's level, at the time of writing. Conversely, the appetite for fixed-income assets continued to wane, with U.S. Treasuries trading at slightly lower prices, pushing 10- year yields 17 basis points higher since the end of last week.
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Weekly Forex Fundamentals |
Written by Forex.com |
May 11 13 04:45 GMT
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It was a wild ride for FX markets at the end of last week. The dollar surged, the yen slumped and some G10 crosses breached key technical levels. Volatility also picked up, 1-month implied volatility in JPY jumped from 11.98% on 2nd May, to 12.95% on 10th May. Other currencies that were notably more volatile last week versus the dollar include NZD and the AUD.
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Weekly Forex Fundamentals |
Written by Wells Fargo Securities |
May 10 13 15:09 GMT
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This week's light calendar of economic releases provided further evidence that the U.S. economy continues to put distance between itself and the recession. Layoffs continue to decline, with weekly first-time unemployment claims falling 4,000 to 323,000, which marks a five-year low. Continuing claims for unemployment are also trending lower, suggesting that more progress is being made at reducing long-term unemployment.
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Weekly Forex Fundamentals |
Written by Wells Fargo Securities |
May 04 13 04:17 GMT
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The plethora of economic data this week reinforced our outlook for softer economic growth in the middle of the year. The April employment report signaled that job growth continued but at a moderate pace. Personal income and spending data further indicated a weakening underlying trend in consumer spending, a view that was reinforced by the slower pace of auto sales in April. The manufacturing sector continued to expand in April, but the pace of expansion downshifted and other readings on the factory sector disappointed. When taken together, the economic data this week point toward a much weaker second quarter.
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Weekly Forex Fundamentals |
Written by TD Bank Financial Group |
May 04 13 04:01 GMT
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Economic news out of the U.S. this week provided a pleasant contrast to the lingering worries surrounding the global growth outlook. Strong consumer spending and rising consumer confi dence, as well as a decent manufacturing survey, served as prologue for today's better-than-expected April payrolls report. Equity markets, both at home and abroad, caught the refreshing wind on their sails and were trading between 2 and 3% higher with respect to last Friday at the time of writing. Conversely, U.S. Treasuries were changing hands at slightly lower prices, pushing 10-year yields 10 basis points higher since yesterday.
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