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Purchasing Managers Index, or what is known as PMI, is an economic report that draws conclusions from business surveys and indicates the business climate in a certain country during a particular period. They usually survey several private companies in the country and track indicators like new orders, production, employment, supplier deliveries, etc. In this regard, PMI is often seen as more comprehensive and useful than ordinary economic data such as GDP (Gross Domestic Product).

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The only way to know the change of interest rates of any major country is by monitoring the economic calendar. Besides, the released schedule of the interesting announcement of central banks, which is released once a month, is also important. The demand for a currency will be very sensitive to the central bank interest rate. Traders using certain strategies like carry trade pay the most attention to the news of interest rates changes.

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According to a study by the Bank of International Settlements that was originally published in 2013 and revised in 2016 about client flows in forex trading, the flow of institutional traders reflects a significantly superior alignment with future pricing than that of corporate and private traders' flows. To put it simply, the power imbalance in forex trading gives a huge advantage to institutional traders.

Their order flow is usually so powerful that it can drive the price to move in a certain direction, hence creating a trend. But don't lose hope just yet because fortunately, there is still a way to analyze market sentiment for retail traders, and that is through the Commitment of Traders data report.

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The major global commodities that have the most influence on currency exchange rates and serve as important indicators in Intermarket analysis are gold and crude oil.

Continue Reading at All You Need to Know About Intermarket Analysis