📝 What is Fundamental Analysis

Fundamental analysis aims to assess the impact of various fundamental and macroeconomic developments on currency trading. These fundamentals include macroeconomic factors such as inflation, interest rates, unemployment, GDP, and more.

These are some key fundamental indicators:

What is GDP (Gross Domestic Product)

GDP measures changes in a nation’s income within an economy. It includes the value of all goods and services produced over a specific period (usually quarterly or annually).

What is GNP (Gross National Product)

GNP includes GDP plus income earned from investments and work abroad.

What is Inflation

Inflation measures changes in the general price level. Often referred to as a hidden tax, inflation reduces consumers’ purchasing power. High inflation is considered negative for the economy, the stock market, and the domestic currency. It is typically reported monthly.

What is the Personal Spending Indicator

The personal spending indicator tracks changes in individual consumer spending. Increased personal spending often leads to higher economic growth and inflation, and the opposite is also true.

What is Unemployment

Unemployment is a macroeconomic indicator that represents the percentage of the workforce that is unemployed relative to the total labor force capable of working.

What is Jobless Claims

Jobless Claims is an economic indicator reflecting the number of people registering as unemployed. Higher jobless claims generally signal negative news for both the stock market and the domestic currency.

What is Industrial Production

Industrial production is an index that measures the total output produced by the country’s manufacturing sector during a given period.

What is Output Index

The output index measures the volume of production output in an economy.

What is PPI (Producer Price Index)

PPI measures the average change in prices received by producers. A rise in the PPI is considered negative for the economy.

What is the Balance of Trade

The balance of trade measures the difference between a country's exports and imports over a specific period (typically monthly or annually). A negative balance indicates a trade deficit, while a positive balance indicates a trade surplus.

What means Currency Appreciation

A currency appreciates when it gains value against another currency. This can result from fiscal or monetary policies. A policy aimed at strengthening the domestic currency is known as a “hard-currency policy” and is typically associated with higher interest rates. The opposite is referred to as a “flexible-currency policy.”