Continuing to explore the main drivers of the currency market, in this paper we consider the following two factors have a direct impact on the trend of the Forex market.
In assessing the economic situation in any country plays a decisive role output of factories, plants and utilities sector. All these areas are united by one economic indicator - industrial production. In addition to the main indicators reflecting the quantity and value of output, this indicator shows the level of utilization of production capacities. Ideal for any country is the maximum utilization of such facilities in conjunction with the increase in the number of goods produced.
Most traders working with this indicator, pay more attention to the sector utilities. This area is considered to be the most unstable and vulnerable to unexpected changes. This state of affairs is explained by the strong dependence of utility industry to weather conditions. Serious deviations from the projected level under the influence of adverse weather conditions can lead to large fluctuations in exchange rates.
The consumer price index or CPI is the main criterion for evaluating the level of the cost of the main types of consumer products on 200 key categories. This figure can be compared with the volume of national exports and draw conclusions about the profitability or losses from the sale of domestic goods and services. In this case, the export should be done very carefully, because the figure plays a crucial role for the majority of traders. This is explained by the possibility of changes in export prices as a result of the strengthening or weakening of the national currency.
On closer inspection, the fundamental approach to the assessment of the economic situation in a particular country, most analysts are the following factors that have a direct impact on the exchange rate:
1. Purchasing Managers' Index, or PMI consists of several components:
• the number of new orders;
• The level of reserves;
• production volumes;
• shipments;
• The level of employment.
2. PPI (the price index for products of key manufacturers) - This indicator measures the average price for a fixed period of time and captures the changes in the cost of goods from the point of sell-side.
3. Special report on durable goods.
4. ECI (wages of employees) - tracks the change in the level of compensation for certain professional groups.
5. Report on the early housing developments.
6. Among studies of the private nature of the palm to keep the consumer confidence index, developed by scientists at Michigan State University.
The ability to understand and analyze the effects of changes in these parameters can most accurately predict the direction of the main trend in the market of buying and selling currencies.