Fundamental Side

Four Laws

1) Gold price rises, the dollar falls; gold price falls, the dollar rises
2) Gold price rises, currency of gold exporting country appreciates
3) Oil price rises, exchange rate of currency oil-exporting countries rises , dependent country’s currency exchange rate falls
4) Raising interest rates will make the currency appreciate

Important Economic Indicators

1) (NFP) non-farm employment data
US nonfarm payrolls (ie, US nonfarm payrolls, non-farm employment) is the US non-agricultural population employment data published by the US Department of Labor once a month, reflecting the US economic trends, the data show that the economy improved, Indicating that the economy turned bad. Non-farm data will affect the Fed’s monetary policy against the dollar, the economy is poor, the Fed will tend to cut interest rates, the dollar depreciation, the economy is good, the Fed will tend to raise interest rates, the dollar appreciated. The number of non-farm payrolls can reflect the growth and growth of the manufacturing and service industries. The reduction in figures represents a reduction in production and the economy is entering a recession and recession. When the social and economic prosperity, consumption naturally increases, consumer and service industry positions will increase. When the number of non-agricultural employment increased significantly, it reflects the healthy development of the economy, theoretically the exchange rate should be beneficial. Therefore, the data is an important indicator of the socio-economic and financial development of the United States. If the data is good for a long time, the dollar is usually supported and strengthened.

2) Unemployment rate
Unemployment Rate refers to a certain period of time all the employed population has the job will not work the labor force figures. Through this indicator can determine a certain period of time the total employment of the working population. Under normal circumstances, the unemployment rate decline, on behalf of the overall economic development, conducive to currency appreciation; rising unemployment, it represents the slowdown in economic development is not conducive to currency appreciation. If the unemployment rate with the same period of inflation indicators to analyze, we can see whether the economic development overheating, will constitute a pressure to raise interest rates, or whether the need to cut interest rates to stimulate economic development.

3) (PMI) Purchasing Managers’ Index
The Purchasing Managers Index (PMI) refers to the US Purchasing Managers’ Index, which is a measure of the US manufacturing industry’s “physical examination table” that measures the manufacturing industry in terms of production, new orders, commodity prices, inventory, employees, orders Delivery, new export orders and imports of eight aspects of the situation index, is a comprehensive economic indicators. The price index and the price index in the purchasing managers’ index are also considered as one of the price indicators, and the employment index is used to predict the unemployment rate and the performance of the non-agricultural employment population. The purchasing managers’ index is the first published monthly data, and in general the increase in the purchasing managers’ index will bring the dollar to fall; the decline in the purchasing managers’ index will lead to a fall in the dollar.

4) (PPI) Producer Price Index
Producer Price Index , is a measure of manufacturers and farmers to sell goods to the store price index. It mainly reflects the changes in the price of the means of production, used to measure the price of goods in different stages of production changes. Thus, the producer price index is a preemptive index of inflation. When the prices of raw materials and semi-finished goods are raised, the price of the consumer products will be reflected in a few months, which will lead to an increase in the overall price level. Intensified. On the contrary, when the index falls, that is, the price of the means of production in the production process has a downward trend, but also Peng to the overall price level decline, weakening inflationary pressures. In the foreign exchange market, traders are very concerned about the indicators. If the price index is higher than expected, there is the possibility of inflation, the central bank may be tightening monetary policy, the currency has a positive impact. If the producer price index falls, it will have the opposite effect.

5) (CPI) consumer price index
The Consumer Price Index, which is a measure of the price of a fixed consumer goods basket, mainly reflects the price changes of consumers paying for goods and services, as well as a measure of the level of inflation, expressed as a percentage change The The level of consumer price index shows that the purchasing power of consumers also reflects the economic boom, if the index fell, reflecting the economic recession, the inevitable trend of the currency exchange rate. When a country’s consumer price index rises, it shows that the country’s inflation rate, that is, the purchasing power of money weakened, according to purchasing power parity theory, the country’s currency should be weakened. On the contrary, when a country’s CPI fell, it showed that the country’s inflation rate fell, that is, the purchasing power of money rose, in accordance with the purchasing power parity theory, the country’s currency should be strong.

6) (CCI) consumer confidence index
The CCI is designed to show consumers’ optimism about their financial outlook, expressed as a percentage by means of calculations. CCI is often used to predict trends in the labor market and the overall economic situation of a country. The increase in this indicator indicates that a country’s currency may rise and its importance is moderate.

7) (ECI) Employment Cost Index
The Employment Cost Index was issued by the US Department of Labor’s Bureau of Labor Statistics at 8:30 am EDT; and on the last Thursday of April, July, October and January, once a quarter. Aimed at the most comprehensive estimate of labor costs. ECI records the individual’s largest expenditure, that is, the change in labor costs. In the foreign exchange market, ECI and the value of the dollar did not show a reliable relationship between. Obviously, if labor costs rise, can lead to higher interest rates. This will attract foreign investors to invest in dollars. Then, higher labor costs also reduced the competitiveness of US companies selling products and services overseas, expanding the trade deficit, which is clearly detrimental to the dollar. In general, if the money market traders believe that the Fed successfully guide the economy to achieve a soft landing, to stop the outbreak of wage inflation, it will enhance the value of the dollar.

8) GDP
Gross Domestic Product refers to the value of all final products and services produced in a period of time (a quarter or year), a country or region’s economy, often Recognized as the best indicator of the state of the economy. It can not only reflect a country’s economic performance, but also can reflect a country’s national strength and wealth. In general, gross domestic product (GDP) consists of four different components, including consumption, private investment, government spending and net exports.

A substantial increase in GDP in a country reflects the booming economy, the increase in national income and the increase in spending power. In this case, the central bank will have the potential to raise interest rates, tighten the money supply, the country’s economic performance and rising interest rates will increase the attractiveness of the country’s currency. On the other hand, if a country’s GDP is experiencing negative growth, it shows that the country’s economy is in a state of recession and its spending power is reduced. , The country’s central bank will likely cut interest rates to stimulate the economy to grow again, the decline in interest rates coupled with economic performance, the attractiveness of the country’s currency will be reduced. Therefore, in general, high economic growth rate will promote the national currency exchange rate rise, and low economic growth rate will cause the country’s currency exchange rate fell.

9) (HSBP) Housing Standard Building Permits
Housing Standard Building Permits: is a leading indicators of future economic development and are designed to help predict the next stage of development of the business cycle, as the property market usually Leading the economic development. When the number of new housing construction increases, on behalf of the overall economy is good or on behalf of the recession of the economy will recover, the foreign exchange rate is good; on the contrary, the decline in the figures show that the economic downturn, or that the healthy economic situation will turn bad, spreads. The construction industry and the automobile industry are two representative industries, when the economy is poor, is the first recession of the two departments; when the economy is better, is the first recovery of the two departments, therefore, the foreign exchange market for the Indicators are extremely sensitive.

10) Industrial Production Index
Industrial Production Index: is an indication of the manufacturing, mining and public utilities sector, the overall production of the index, published once a month.

11) Personal income
Personal income refers to the sum of income earned by individuals from various sources, including income from wages, rental income, dividends, dividends and social benefits. This indicator is an effective indicator for predicting individual spending power, future consumer buying trends and assessing good or bad economic conditions. Personal income is better than the decline in personal income to enhance the economy on behalf of the decline, of course, is the slowdown in the signs of recession, the impact of the currency exchange rate is self-evident. If the personal income rises too fast, the central bank worried about inflation, will consider raising interest rates, interest rates will certainly have a strong effect on the currency exchange rate.
12) Budget deficit
Budget Deficit, which is published monthly by the Ministry of Finance. It mainly describes the implementation of the government budget, indicating the total revenue and total expenditure of the government: the budget deficit is the budget deficit, and the budget surplus The balance of payments is equal to the budget balance. Forex traders can use this data to understand the government’s actual budgetary performance and to predict whether the Treasury will need to issue bonds or treasury bills in the short term to offset the deficit, as short-term interest rates are affected by the issuance of bonds. In general, the foreign exchange market is skeptical of the government budget deficit. When the deficit increases, the market will expect the currency to fall, and when the deficit is reduced, it will benefit the currency.

13) Inventory
Inventory , refers to the overall sales industry (including wholesale and retail) monthly inventory. They may be raw materials, products that are being produced or manufactured, as a buffer for unexpected orders. The amount of inventory is a figure that subtracts the amount of sales. If the production is completed, the sales volume is high, the public consumption is strong, the stock volume will certainly be reduced to the lowest level, the commodity circulation speed is quick, the economy is in good condition, the currency exchange rate will be on the rise. On the contrary, the accumulation of inventory, capital backlog, there is production, no consumption, the economic downturn, light and foreign exchange rates.

14) (RSI)Retail Sales Index
Retail Sales Index is a cash or credit card transactions are the retail trade business, but the service industry is not included in the statistics derived from the prosperity index. The increase in retail sales, on behalf of the increase in personal consumption expenditure, the economic situation improved. If the expected interest rate increases, the dollar favorable; the other hand, if the decline in retail sales, on behalf of the economy slowed down or poor interest rates may be lowered, the dollar bias negative. US retail sales index Published: 11 – 14 per month.

15) Manufacturing index
The manufacturing index is an important index in economics, which together with the consumer price index, producer price index, industrial production index, etc. constitute a macroeconomic barometer. The manufacturing index can reflect the development of the country’s manufacturing industry over a period of time, especially for industrial countries (the United States, the European Union, etc.), if the published data is not as expected, may lead to the country’s currency in a period of time in a weak ( That is down); if better than expected, then in the advantage (ie, rise). Investors can publish data when the opportunity to do short-term operation.

Crucial meetings that affect foreign exchange market

1) Federal Reserve meeting
2) Federal Reserve interest rate resolution meeting
3) European Central Bank interest rate meeting
4) Bank of England interest rate decision
5) Bank of Japan interest rate decision

《2017 International Central Bank Meeting Preview 》

Federal Open Market Committee (FOMC)
Federal Reserve Interest Rate Meeting Interest Rate Resolution Hold a press conference
03/14-03/15 03/15 03/15
05/02-05/03 05/03  
06/13-06/14 06/14 06/14
07/25-07/26 07/26  
09/19-09/20 09/20 09/20
10/31-11/01 11/01  
12/12-12/13 12/13 12/13
European Central Bank (ECB)
Management Committee Meeting Bank Board Meeting Interest Rate Resolution Hold a press conference
02/15   03/09 03/09
04/05   04/27 04/27
06/08   06/08 06/08
07/05   07/20 07/20
08/02   09/07 09/07
09/20 09/21    
10/04   10/26 10/26
12/06 12/07    
    12/14 12/14
Bank of England
Date Interest Rate Resolution Announce the record of the meeting
Bank of Japan Monetary Policy Meeting
03/15-03/16 04/26-04/27 06/15-06/16 07/19-07/20 09/20-09/21 10/30-10/31 12/20-12/21

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