Currency "fundamental analysis"

Currency "fundamental analysis"

Currency market characterized Bmosmeth throughout the year thanks to the system margin that allows us to borrow various currencies for trading them against each other, In the first case we buy currency at a low price and sell at a higher price, eg we buy 5 contracts in the euro against the dollar (contract size per 100000 EUR) at a price 1.1450 dollars after a sell at 1.1750 dollars and result of the process is a profit of $ 15,000 in the sense that the process winning by 300% because the amount of insurance user versus 5 contracts is $ 5000.

To illustrate the previous process is that the Bank Bagheradhana amount 572,500 dollars to pay for purchase 500,000 euros at 1.1450 dollars, after we sold the 500,000 euros when the price reaches 1.1750 dollars and arresting 587,500 dollars when the bank deduct the amount borrowed from him in advance which 572,500 dollars and the remaining amount $ 15000 be our lot we traffickers.

In the other case is when the euro on the pace of downward so that we sell at a high price and buy it at a low price, and an example of this, we sell 5 contracts against the dollar (contract size 100000 EUR) at 1.1930 dollars, after we buy at 1.1730 dollars and output process is a profit of $ 10000, in the sense that the process winner by 200% because the amount of insurance user versus 5 contracts is $ 5000.

To clarify the previous process is that the Bank Bagheradhana amount 500,000 euros and we sell (buy dollars), compared 596,500 dollars after a drop the euro, and buy only the amount 500,000 euros at 1.1730 and so pay 586,500 dollars, so retrieves the bank 500,000 euros own and are we benefited from the provision of $ 10000 resulting from lower euro and which are entirely of our share.

Positive feature in the previous operations is that we are not forced to use these huge sums of money from my wallet but used these amounts of bank money, and was size Mkhatrta confined only to the amount of insurance is $ 5000 for 5 euro in contracts, including a total of 500,000 euros.

Based fundamental analysis Fundamental standards on the state's economic indicators are essential, but there are exceptional cases in which different criteria fundamental analysis which in the case of war or natural disasters, or in our current terrorist attacks.

The interest rate Interest rate of the most important indicators that affect the exchange rate, so that the relationship between the interest rate and the value of the currency is a direct correlation so that if the interest rate rises increased the value of the currency and vice versa. The interpretation of this relationship is that the central bank if it wants to increase the value of the currency it will increase the interest rate granted on deposits which constitutes an attraction for investors to buy the currency and make a deposit, while when he wants the central bank to reduce the value of the currency it Efum reduced interest rate, which is a factor expelled for investors canvassers selling the currency in search of another currency with the highest interest rate.

Equally important is the gross national Gross Domestic Product main index for the health of the country's economy and includes four main components (consumption, investment, procurement state, and net exports) and reflects the changes the percentage, the higher it means an improvement, which is reflected on the currency improvement and if dropped, it means deterioration which contributes to the low value of the currency.

On the other side affects the level of unemployment Employment Report adversely on the value of the currency, and is intended to three statistical elements: who are looking for work (in addition to the loss of his job) who got a job, and the rate of change in the hourly wage.

Economic indicators, the most important consumer price index Consumer Price Index CPI and its relationship is proportional to the value of the currency, and is intended measure of the price of a fixed basket of goods and services paid by the average consumer, and includes food prices, clothing, accommodation, transportation, and other goods and services used by consumers daily, and can be divided into seven categories are: housing, food, transportation, medical care, clothing, entertainment, other. Assesses each category according to its relative importance.

And not less than per capita income importance Personal Income as reflected influence in direction on the value of the currency, and give an explanation about the size of expenses person represents the market value of all goods and services purchased by the individual and also represents what is happening by the individual income from various sources such as salaries, wages, income property .. Etc.. The size can be inferred savings calculate the difference between these two elements (income - expenses).

As we talked already there Index Trade Balance Trade Balance and its relationship with the value of the currency is proportional terms reflects the difference between the value of exports and imports of the state, in the case of increased exports over imports is called surplus in the case of the opposite is called a deficit, and it is worth noting that the trade balance for the United States continuously disability (increased imports) since the mid-seventies until now.

In such important influences Producer Price Index Producer Price Index PPI covariant on the value of the currency which measures the monthly change in wholesale prices of goods, industry, and what is in the production stage, and is often used to measure the size of inflation.

It also affects the industrial production index of Industrial Production direction also on the value of the currency, which explains this indicator is the rate of change in the amount of monthly output of factories, mines, and local services. And can affect the cost of production on the size of the inflation direction too, but in exceptional cases.

Also affect housing Construction Index Housing Starts direction on the value of the currency where housing is being built from the foundations, and often have lower interest rates on loans as a catalyst for increased construction where families are encouraged to borrow to build houses harbors, which in turn stimulates the economic cycle.

There PMI Purchasing Managers Index, which affects covariant the value of the currency as is widely used in countries with an industrial economy to assess the economic confidence, and using Germany, Japan and Britain to assess the industry and services, and extraction is through a series of information for businesses new employment, input prices (raw), and the prices of assessments (Price), and expected commercial objectives.

The index affects the balance of payments Balance Of Payment also covariant on the value of the currency remittances represents Transactions that fall and graduated from the State and include Aldaa, and services, and financial assets, and tourism. It consists balance of separate accounts are current account Current Account and respect next to goods and services, and interest paid in addition to public transfers, and other account called the capital account Capital Account and respect the size of foreign direct investment and indirect, such as buying companies, stocks, bonds, bank accounts, real estate , and factories. This account is influenced in some cases, the economic climate in other countries, whether positively or negatively.

There are also indicators Monetary It n M1 1 and are intended to money liquid portable or in the form of current accounts or traveler's checks, and ready Xjulh, and also n M2 2 They include former addition to liquid assets other such short-term deposits, savings accounts, accounts of investment funds and accounts market money deposited with the brokers, and finally n M3 3, which include two in addition to long-term deposits, and large accounts (more than $ 100,000) and investment funds for financial institutions.