Forex: The Importance of Global Consideration

Fundamental analysis analyzes developments in an economy as well as their monetary policy, as this can have an enormous impact on currencies. While individual stocks of companies are analyzed on the stock market, for example, it is more important that a global view is made in the case of forex trading, anyoption since the fundamental influencing factors on the foreign exchange market are generally macroeconomic statements.

For Forex traders, it is essential to deal with the overall economic indicators, which is why the most important key figures are explained in more detail in the following sections.

Table of contents

  • Gross domestic plus500 product (GDP)

    The gross domestic product of a respective national economy is a total value of all services and goods offered or produced during a marketing year. Thus there is information about the performance of an economy or state. Of course, GDP also has an impact on the currency and its demand. Once again, the demand for exchange rates against the other currencies. For example, German GDP influences the strengths and weaknesses of the euro. Copy Trading

    GDP itself is influenced by different factors, such as import / export, domestic demand or economic investment. Extreme impacts occur in international and global crises, natural catastrophes or trade barriers.

    GDP is measured on a quarterly basis. Depending on the country, various publications are available. This can be, for example, the central bank, a statistical authority or the government itself. In principle, GDP is rising in good economic times IQ Option and is falling or stagnating in bad times (recession).

    For fundamental analysis, GDP is a key indicator that can have a significant impact on the foreign exchange market. Even before the publication of GDP, economic institutes are trying to predict this, which is why an expectation is created in the foreign exchange market. Already during this phase there may be strong price fluctuations.

    If GDP growth is positive, a bullish signal is emerging on the stock market, as it is expected that business activity will be increased. On the other hand, GDP growth can have different effects on the Forex market, as currencies are always traded in pairs. As a result, the 24option currency appreciation effects the depreciation of the other currency. In addition, the overall economic development must also be taken into account, taking into account the monetary policy as well Social Trading as the attitude of the central banks. For the right assessment of the market reactions, Forex traders must therefore necessarily find out what the participants in the market is moving. Equally important is how the market interprets economic data.

    The term “inflation” comes from the economic theory and indicates an increase in the price level of goods. This also means that the purchasing power of money is diminished. Inflation is also referred to as a “general rate of inflation” in the stock markets as well as in etoro the foreign exchange market and plays an important role here. The measurement is official and the results are published monthly.

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    Among other things, inflation has the property that financial assets are depreciated by inflation, which is particularly true of nominal values (eg interest-bearing securities). On the other hand, the equity market is benefiting from rising inflation, since shares represent a real asset and a share in so understanding a company. Thus, an increasing inflation rate may be bullish for the stock market as well as for the exchange rate.

    Inflation is particularly important for the monetary policy of the central bank, which is why the development of inflation also plays an important role in the forex market. Increases