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FUNDAMENTAL ANALYSIS
Fundamental analysts look at the value of an investment and the economic conditions that affect the valuation of a nation's currency.
Major fundamental factors that play a role in the movement of a currency are called economic indicators.
Economic indicators are reports that are released by organizations that detail a country's economic performance (government is one of these organizations).
Since economic calendars are a public domain everyone has a free access to this information. Most brokers offer this service as part of the platform package.
It is prudent that each trader is aware of the times when these reports are released, as currencies can move up or down very fast around these times.
Each indicator serves a particular purpose. Here are the five major reports:
Employment Rate
The Gross Domestic Product
Retail Sales
Industrial Production
Consumer Price Index (CPI)
Some of the other major indicators include the purchasing managers index (PMI), durable goods report, producer price index (PPI), employment cost index (ECI), and housing starts.
There are also many privately issued reports, the most famous of which is the Michigan Consumer Confidence Survey. All of these provide a valuable resource to traders, if used properly.
Each time that you see a report on the economic calendar and you are not sure what it means, you need to do some homework and research the subject.
(Free encyclopedia: www.wikipedia.org)
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