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Posts Tagged ‘forex news’

Fundamental analysis allows a trader to evaluate the macroeconomic conditions in which the domestic currency is, to see outlooks of economic development. This is an important indicator, because if the economy is in decay, it is hardly that someone wants to buy its currency or invest in companies (buy the stock, for instance). Fundamental analysis is essentially long-term, since the economy – “long player”, if some process has begun, then it will stop not soon. Its applying gives the trader vision of the situation as a whole.

And the main point in the fundamental analysis is the tracking of news that may have economic and political nature, but also it is considered a variety of force majeures, natural disasters, etc. To news of an economic nature contains such main indicators as GDP growth, unemployment, inflation, development of industrial production, etc. Altogether there are about 30 main macroeconomic indicators, which will impact the change of course very much. This news may be the data about changing the basic interest rates, a press conference of the chief of the Central Bank. The basic account interest rate -is the percentage, under which the country’s central bank makes loans to commercial banks. The discount rate is the basic mechanism that is applied to control of inflation. And the higher it is, the more attractive a given currency to investors is.

The publication of this information occurs in a strictly defined time and date, and information about the timetable for its announcement can be obtained from special economic calendars. And at that moment, when the news appears on the market, according to published data, a sharp bound of the course may happen in the market.

Influence of news on exchange rate.

Let’s look at an example of Jan. 22, 2008. Assume, you plan your deal and would like to purchase Euros. And you know that today it will be released the decision to change the basic discount rate of the European Central Bank (ECB). Until that time there were gossips and speculations at the market that the rate may be lowered due to some slowing of economic growth in the Eurozone, and then the attractiveness of assets for investors in the Euro would be lowered. That is why the decline of the euro against the dollar could be seen. When the decision was announced, it became clear that rate remained on the same level (4%), the market breathed a sigh of relief, and the course hoicked. The subsequent press conference of ECB President Jean-Claude Trichet gave optimism to the speculators, during which he said that the ECB will promptly take action to maintain the steadiness of Euro.

Here is how a trader may use fundamental analysis in his trade. But that’s not all. We considered an example of the so-called short positions, when your transaction lasted only several hours. But the lasting of the transaction may be a few days or even weeks. And here, to forecast the movement of the rate, you also use the fundamental analysis.

Currently people are searching for additional or even primary sources of income as never. World economy is still in tough condition, and to find a well-paid job is not that easy task. And forex is one of the ways to earn some money. To trade successfully one needs to know events on the market, so live forex news is of great help here. Those who don’t know where to receive fx news can use the Internet. Just type “forex news trading“, for example, in Google or other search engine and you will get many news sources to choose from.