Fundamental Analysis
Fundamental Analysis
Aside from technical analysis, another primary approach to analyzing currency market fluctuations is called fundamental analysis. Fundamental analysis is the examination of economic indicators, asset markets and political considerations when evaluating a nation's currency in terms of another.
Fundamental Factors
Here some major fundamental factors that can affect currency prices:
How is Forex Trading Regulated?
The legal framework under which trading in off-exchange (also called over-the-counter or OTC) trading in foreign currencies is regulated is the Commodity Futures Modernization Act of 2000 which was enacted into law in December 2000.
What is the US Dollar Index®?
Just as the Dow Jones Industrial Average provides a general indication of the value of the US stock market, the US Dollar Index (USDX®) provides a general indication of the international value of the US Dollar. Similar in many respects to the Federals Reserve Board's trade-weighted index, the USDX does this by averaging the exchange rates between the US Dollar and six major world currencies.
Trade Weighted Index
The Trade Weighted Index, also known as the effective exchange rate, is a multilateral real exchange rate which is a weighted average of real exchange rates of home and foreign currencies, with the weight for each foreign country equal to its share in trade.
Commodity Research Bureau Index (CRB)
The Commodity Research Bureau -- CRB -- Founded in 1934 and currently a division of Barchart.com, Inc., the CRB is the oldest and most well-known commodities and futures research and analysis firm.
Influencing Factors on US Dollar
Federal Reserve Bank (Fed)
Federal Open Market Committee (FOMC)
Interest Rates
Treasury
Economic Data
U.S. Stock Market
Cross Rate Effect
Additional Factors
Federal Open Market Committee (FOMC)
Interest Rates
Treasury
Economic Data
U.S. Stock Market
Cross Rate Effect
Additional Factors
Influencing Factors on EUR/USD
The Euro-Zone
European Central Bank (ECB)
ECB Policy Targets
Interest Rates
Economic Data
Cross Rate Effect
Additional Factors
European Central Bank (ECB)
ECB Policy Targets
Interest Rates
Economic Data
Cross Rate Effect
Additional Factors
Influencing Factors on GBP/USD
Bank of England (BoE)
Monetary Policy Committee (MPC)
Interest Rates
Treasury
Economic Data
FTSE-100
Cross Rate Effect
Additional Factors
Monetary Policy Committee (MPC)
Interest Rates
Treasury
Economic Data
FTSE-100
Cross Rate Effect
Additional Factors
Influencing Factors on USD/CHF
Swiss National Bank (SNB)
Interest Rates
Economic Data
Cross Rate Effect
Additional Factors
Important Note
Interest Rates
Economic Data
Cross Rate Effect
Additional Factors
Important Note
