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GDP is published quarterly, and it is too long for companies to wait for GDP before making important decisions. Besides, different countries often have different methods of calculating GDP. Such a difference makes them practically incomparable.

Contrarily, an independent institution that counts PMI for many countries will certainly use a similar method. Unlike other economic reports published by government bodies, PMI is commonly held and published by private institutions. This ensures the independence of the survey and lends credibility to the result.

Continue Reading at Guide to PMI Data in Forex Analysis

As a matter of fact, yes. For instance, there is often a correlation between the rise of the US Dollar and strong gains in stock indices like Dow Jones, NASDAQ, and S&P500. Similarly, a correlation has been observed between the Nikkei stock index and the Japanese Yen.

Continue Reading at Correlation Between Stock Market And Forex

Interest rates add value to every country's currency. Higher interest rates in relation to a currency means it offers relatively higher return compared to any other currency. This way, the higher interest rates in a country, the demand for their currency will rise too because investors will want to have them.

The opposite may happen with lower interest rates. When a country's central bank lowers interest rates, the exchange rates will undergo depreciation. For instance, the Reserve Bank of Australia (RBA) cut their interest rates twice in 2013. Even further, until December of that year, the governor repeatedly mentioned the possibility of a third cut. As a result, AUD became one of the worst major in 2013, having entered a bearish trend that went on until 2014.

Continue Reading at Central Bank Policies That Affect the Forex Market

Fundamental and important data affect the demand for a currency, especially the Gross Domestic Product (GDP), the Consumer Price Index (CPI), and the Employment Figure. Those three indicators reflect the economic condition of a country and they directly affect the exchange rate of the currency.

Whatever strategy you use in trading, you must monitor the three data mentioned for determining the tendency of currency's price movement based on the capital inflow and outflow in the country. The country with a strong economic condition will attract more investors so more money supply will flow into the country, and vice versa.

Continue Reading at Everything You Need to Know About Fundamental Analysis