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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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Fundamental Archives |
Written by Trade The News |
Jan 05 09 10:30 GMT
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The USD retraced its earlier gains as the New York morning wore on, but maintained gains against the EUR and CHF pairs. The EUR/USD pair had tested the 1.3555 level but drifted back above 1.36 ahead of the US Construction data and the US Treasury announcement regarding the issuance size later this week for the three- and ten-year maturities. The USD/CHF firmed during the early European morning. Dealers had cited several factors behind the dollar's advance during the session with possibilities that President-Elect Obama would initiate a big stimulus plan to help move US out of recession once he is in office. USD/CAD is moving below the 1.20 handle while the AUD/USD probed the mid-0.71 neighborhood. |
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Fundamental Archives |
Written by Foreign Exchange Analytics |
Jan 05 09 10:16 GMT
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No doubt there are risks to the Obama optimism trade - Republican Congressional leadership is beginning to stir and questioning the scale of the stimulus Obama's transition team has been batting around and could prove obstructionist (recall resistance to TARP and the auto bailout bill). Even Congressional Democrats fear that the lack of detail in the Obama fiscal stimulus proposal makes any early passage (for January 20, 21 presidential signing) of fiscal stimulus less likely. Furthermore, there is no reason to assume that foreign investors will feel comfortable committing more savings to the US public and private sector to pay for a qualitative change in US government debt issuance (good news is US public will save more ahead and will buy less foreign goods and services and compensate for some decline in foreign capital inflow). |
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Fundamental Archives |
Written by Wells Fargo Securities |
Jan 05 09 10:03 GMT
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Total construction spending fell 0.6 percent in November with an upward revision to September and October. Residential construction spending fell 4.1 percent and nonresidential construction spending increased 1.0 percent. We now expect nonresidential construction spending to contribute to economic growth in the fourth quarter. |
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Fundamental Archives |
Written by Crown Forex |
Jan 05 09 08:42 GMT
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All it took was the announcement by President Elect Barack Obama concerning the $300 billion tax cut to move markets across the globe from currencies to stocks. We still see the dollar on the rise as majors are attempting to recover some of the previous losses recorded earlier in the session. |
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Fundamental Archives |
Written by Forex.com |
Jan 05 09 07:31 GMT
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The London session saw some impressive price action and the overall flavor was a much higher US dollar. Talk that the US fiscal stimulus package could total $775 billion and that about $300 billion will come via tax cuts looks to be putting a good near-term bid under the buck here. In that this would help the US economy beat others around the world towards recovery, it is very positive for the greenback. |
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Fundamental Archives |
Written by Black Swan Capital |
Jan 05 09 07:30 GMT
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Do you remember what economists used to tell us about the global economy? If not, let me remind you. I remember the mantra-like chant from very clearly: There are major imbalances across the global economy. Some countries save too much, others borrow and spend too much. |
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