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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 Forex.com |
Apr 20 12 18:08 GMT
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The major data release in the UK this week will be the preliminary Q1 GDP reading. There is considerable uncertainty around this figure due to some strong data in the services sector, especially retail sales, balanced by some disappointments in the manufacturing and construction sectors. Retail sales for March rose 1.5%, more than the 0.4% expected. This was mostly due to the effects of good weather boosting demand for clothes, footwear and gardening equipment. This helped to reverse some of the weakness in the first two months of the year. There was also good news on the labour market front. The number of unemployed dropped by 35,000 in the three months to February, the first quarterly drop since May 2011.
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Weekly Forex Fundamentals |
Written by Wells Fargo Securities |
Apr 20 12 18:05 GMT
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The full week of economic releases painted a somewhat mixed picture, but the underlying trend still reflects an economy that is growing at a modest pace. Much of the disappointing data released during the week was largely due to some activity being pulled forward due to the milder-than-usual winter.
Housing starts fell 5.8 percent in March, the second consecutive monthly decline. For the timid at heart, two months of below-consensus data may lead some to dismiss genuine improvements. We still contend stabilization will become more apparent once there is a return to normal weather conditions. That said, the decline in starts was largely concentrated in the volatile multifamily component. Forward-looking permits, however, rose 4.5 percent in March and are up more than 30 percent on a year-ago basis. Moreover, anecdotal reports from builders and realtors suggest better days are ahead for the industry.
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Weekly Forex Fundamentals |
Written by TD Bank Financial Group |
Apr 20 12 17:25 GMT
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The slow grind recovery can take its toll on forecasters. As the data swings positive, it is easy to get caught up in the wave of optimism, thinking that maybe this time it's for real and growth is finally breaking out. But, just wait a few weeks and the momentum fades and concerns turn in the other direction: are we facing a renewed slowdown or, worse, a double-dip?
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Weekly Forex Fundamentals |
Written by Danske Bank |
Apr 20 12 14:32 GMT
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Despite some relatively successful debt auctions, there are growing concerns about public finances, especially in Spain.
On the other hand, economic data have been largely positive, corporate earnings have surprised on the upside and the IMF has revised up its forecast.
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Weekly Forex Fundamentals |
Written by Investica |
Apr 16 12 02:03 GMT
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China's decision to widen its currency band will tend to dominate markets at the Asian open on Monday. The move will be seen as a vote of confidence by China's leadership in the prospects for a controlled economic landing which should also boost risk appetite and as a by-product support the Euro as defensive dollar demand fades.
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Weekly Forex Fundamentals |
Written by Wells Fargo Securities |
Apr 13 12 19:04 GMT
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United States economic data releases so far this month have not been kind to the bulls on Wall Street. The poor March payroll report rattled some nerves, but the payroll report was just the first of several others that followed this week, confirming a softer tone to U.S. economic data.
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Weekly Forex Fundamentals |
Written by TD Bank Financial Group |
Apr 13 12 18:54 GMT
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Data this week revealed some upside risk to our 1.7% first quarter (Q1) growth forecast. Baring any data surprises in March, Q1 growth is now poised to register a 2.5-3.0% reading. On the surface, this is encouraging and will mark the first time since 2010 that growth has exceeded 2.5% for two consecutive quarters. Unfortunately, stronger Q1 growth does not reflect an improved outlook, and soft underlying demand will lead growth back towards 2% in Q2.
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Weekly Forex Fundamentals |
Written by Forex.com |
Apr 13 12 18:47 GMT
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At the end of last week market sentiment towards the Eurozone took a turn for the worse. Stocks closed down sharply and Spanish 10-year bond yields surged to 6% at one stage. The cost to insure Spanish debt against default reached a record high; while bond yields are a mere 70 basis points away from the euro-era record highs reached in November 2011.
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Weekly Forex Fundamentals |
Written by Danske Bank |
Apr 13 12 15:53 GMT
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Focus is back on the euro crisis as pressure has built in particularly Spain with risk of contagion to Italy.
On the data front the week has been mixed with soft US jobless claims but decent trade data. In China lower-than-expected GDP growth for Q1 was offset by stronger activity in March data, which points to a clear bottom in Q1.
We still believe the global economy is on track for stronger growth
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Weekly Forex Fundamentals |
Written by Investica |
Apr 09 12 11:23 GMT
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The US economy will certainly come under further close scrutiny following the weaker than expected payroll report on Friday and markets will look for Bernanke's guidance on whether to sell the dollar. Much of the payroll disappointment stems from seasonal factors, especially the decline in retail and construction jobs, and it is dangerous to over-analyse the data for potential fresh US vulnerability. Nevertheless, the Sauron-like eye of media and market attention will swivel back round to the Federal Reserve and the possibility of fresh quantitative easing. The Fed will start to feel the pressure on the electoral cycle as it will be very reluctant to take action over the second half of the year. The FOMC decisions on April 25th and June 20th will therefore, probably be the only chances for action over the remainder of this year.
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