ECONOMIC FACTORS
In analyzing the factors that affect of a country's economic fundamentals, economic indicator is one factor which can not be separated and become an important part of the overall fundamental factor themselves. As advances on science and technology, to get the of current information sources, a trader will often use information derived from computer monitors, for example through Dow Jones Telerate, Reuters, Bloomberg and Knight Rider. Economic indicators which often used in fundamental analysis include:
In analyzing the factors that affect of a country's economic fundamentals, economic indicator is one factor which can not be separated and become an important part of the overall fundamental factor themselves. As advances on science and technology, to get the of current information sources, a trader will often use information derived from computer monitors, for example through Dow Jones Telerate, Reuters, Bloomberg and Knight Rider. Economic indicators which often used in fundamental analysis include:
1. Gross Domestic Product
Gross domestic product is the sum of all goods and services produced by a country well by the company domestically and by foreign companies operating in the country in a given period.
Gross domestic product is the sum of all goods and services produced by a country well by the company domestically and by foreign companies operating in the country in a given period.
2. Inflation
A trader will always pay close attention to the development of the inflation rate. One way the government in tackling inflation is by raising policy interest rates. Policies interest rate increase is expected to strengthen the exchange rate and controlling inflation. Use the inflation rate as an indicator of economic fundamentals is to reflect the level of GDP and GNP into the actual value. Value of GDP and GNP is an indicator that is essential for a trader in comparing investment opportunities and risks abroad. Some indicators to determine the level of inflation:
A trader will always pay close attention to the development of the inflation rate. One way the government in tackling inflation is by raising policy interest rates. Policies interest rate increase is expected to strengthen the exchange rate and controlling inflation. Use the inflation rate as an indicator of economic fundamentals is to reflect the level of GDP and GNP into the actual value. Value of GDP and GNP is an indicator that is essential for a trader in comparing investment opportunities and risks abroad. Some indicators to determine the level of inflation:
- Producer Price Index (PPI), is an index that measures the average changes in prices received by domestic producers for every output produced in every level of the production process. PPI data collected from various sectors of the economy especially in the manufacturing, mining and agriculture.
- Consumer Price Index (CPI), used to measure the average change in retail prices and a group of goods and services. The second index, the CPI and PPI, Trader used as an indicator to measure the rate of inflation. A trader can not expect that the Central Bank will raise interest rates if one of the indicators give a strong signal about the inflation and lowering interest rates to state otherwise. For example, the impact of the Gulf War in 1991 triggered the rise in oil prices so that the CPI index in the United States also rose. However, due to the increase in the CPI index did not last long, the Central Bank of the United States did not take any action.
3. Balance of Payment
Balance of Payment is a balance sheet which consists of all activities of international economic transactions of a country, both commercially and financially, with other countries in a given period. Balance of Payment reflects all transactions between residents, government and employers of domestic and foreign parties, such as export and import transactions, portfolio investments, transactions between the Central Bank and others. A commonly used indicator is the trade balance / current account. Other factors affecting the balance of payments is the flow of foreign investment into the country in the form of Foreign Direct Investment and Portfolio Investment. Example: Japan's trade surplus against the United States in 1998 gave a clear indication of the increasing volume of demand for yen in trading activities. As a result, the exchange rate of yen against the U.S. dollar strengthened.
Balance of Payment is a balance sheet which consists of all activities of international economic transactions of a country, both commercially and financially, with other countries in a given period. Balance of Payment reflects all transactions between residents, government and employers of domestic and foreign parties, such as export and import transactions, portfolio investments, transactions between the Central Bank and others. A commonly used indicator is the trade balance / current account. Other factors affecting the balance of payments is the flow of foreign investment into the country in the form of Foreign Direct Investment and Portfolio Investment. Example: Japan's trade surplus against the United States in 1998 gave a clear indication of the increasing volume of demand for yen in trading activities. As a result, the exchange rate of yen against the U.S. dollar strengthened.
4. Employment
Employment is an indicator that can give you an idea of the real condition of the various sectors of the economy. Indicator of the level of employment can be used as a tool for analyzing whether a country's economy a healthy. If the economy is in a state of full capacity / full capacity it will be achieved full employment. If the opposite, then the unemployment rate will increase. Employment level is a very important economic indicator for the financial markets in general and foreign exchange markets in particular.
Employment is an indicator that can give you an idea of the real condition of the various sectors of the economy. Indicator of the level of employment can be used as a tool for analyzing whether a country's economy a healthy. If the economy is in a state of full capacity / full capacity it will be achieved full employment. If the opposite, then the unemployment rate will increase. Employment level is a very important economic indicator for the financial markets in general and foreign exchange markets in particular.
This information can I give today.
Thank you.
Thank you.
No comments:
Post a Comment