Economic Indicators in Forex

Forex traders depend on the same two essential analysis- the fundamental and the technical. Technical analysis are used much for the same purpose-price is supposed to mirror all news while the charts become the matter of analysis.
Fundamental analysis looks more on the inherent value of the investment and takes into consideration the economic conditions that influence a nation’s currency. Some major fundamental factors that affect the value of a currency in forex:


Economic indicators
Economic indicators comprise of the reports given by the government or even by a private association that contain details about the nation’s economic growth and development. Apart from these other factors and policies are also bound to have a direct /indirect influence on the nation’s development.

Such reports are published at regular intervals providing indications and insights into the nation’s improvement (or decline). Forex and stock market is directly influenced in price and volume in case there is any departure from the standard.

Economic reports are good source of vital statistics such as the unemployment figure, housing, etc. Needless to say each indicator serves its own purpose- some of the more important can be outlined as:


GDP or the Gross Domestic Product
GDP is by far the most comprehensive indicator of the country’s economic health. GDP is the market price of all the products and services produced in a country in one financial year. GDP can and does a double edged sword as so most investors consider the preliminary and the advance reports released in the months before the GDP figures come out.


Retail Sales
Retail sales reports compute the total sales receipts of all the retail stores of the country. The measure is gotten from a varied sample of the stores around the country. The retail sales reports is practical in that it is timely and measures the consumer spending patterns that takes into consideration the seasonal variables. Retail sales reports are used to forecast the performance of other lagging indicators. The reports are good for determining immediate direction of the economy. Retail sales reports are almost equivalent to the sales activity of a public company.