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Foreign Exchange Trading (FOREX): Analysis & Management Economic Indicators. Prepared and presented by Dr. Ahmad Khasawneh. FOREX Fundamental Analysis The Economics Indicators. Analyzing the data:

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Foreign Exchange Trading (FOREX): Analysis & Management Economic Indicators

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Foreign exchange trading forex analysis management economic indicators

Foreign Exchange Trading (FOREX):Analysis & ManagementEconomic Indicators

Prepared and presented by

Dr. Ahmad Khasawneh


Forex fundamental analysis the economics indicators

FOREX Fundamental Analysis The Economics Indicators

  • Analyzing the data:

    • Evaluating data changes (over time, compared to the market participant forecast, relative to the business cycle, compared to previous periods average, normal range).

    • Assessing whether the data change is significant or not.


Forex fundamental analysis the economics indicators1

FOREX Fundamental Analysis The Economics Indicators

  • U.S. Economics Statistics:

    • Unemployment: is the percentage of the unemployed people to the total labor force in the economy.


Forex fundamental analysis the economics indicators2

FOREX Fundamental Analysis The Economics Indicators

- Employment Decrease U.S. Dollar

- Unemployment increase will depreciate

- Employment Increase U.S. Dollar

- Unemployment Decrease will appreciate


Forex fundamental analysis the economics indicators3

FOREX Fundamental Analysis The Economics Indicators

  • Employment tends to grow the fastest during the recovery phase of the cycle – 260k per month.

  • Employment tends to grow 100k faster during the rapid growth phase than the slower phase.

  • The significant unemployment rate change is about 0.2pp.


Forex fundamental analysis the economics indicators4

FOREX Fundamental Analysis The Economics Indicators

  • Gross Domestic Product (GDP):


Forex fundamental analysis the economics indicators5

FOREX Fundamental Analysis The Economics Indicators

- GDP Decrease U.S. Dollar will depreciate

- GDP Increase U.S. Dollar will appreciate

  • 0.1pp on a quarter to quarter basis is the minimum

    significant Variation.


Forex fundamental analysis the economics indicators6

FOREX Fundamental Analysis The Economics Indicators

  • Consumer Price Index (CPI):


Forex fundamental analysis the economics indicators7

FOREX Fundamental Analysis The Economics Indicators

- CPI Decrease U.S. Dollar will depreciate

- CPI Increase U.S. Dollar will appreciate

  • The normal range of the CPI change lies between

    0.1% - 0.5%.


Forex fundamental analysis the economics indicators8

FOREX Fundamental Analysis The Economics Indicators

  • Producer Price Index (PPI):


Forex fundamental analysis the economics indicators9

FOREX Fundamental Analysis The Economics Indicators

- PPI Decrease U.S. Dollar will depreciate

- PPI Increase U.S. Dollar will appreciate

  • The normal range of the CPI change lies between

    0.0% - 0.5%.


Forex fundamental analysis the economics indicators10

FOREX Fundamental Analysis The Economics Indicators

  • Employment Cost Index (ECI):


Forex fundamental analysis the economics indicators11

FOREX Fundamental Analysis The Economics Indicators

- ECI Decrease U.S. Dollar will appreciate

- ECI Increase U.S. Dollar will depreciate

  • The average quarterly increase in the ECI was

    1.2% and 1.4% in the recession and recovery,

    and 1.1% in the expansion.


Forex fundamental analysis the economics indicators12

FOREX Fundamental Analysis The Economics Indicators

  • Average Hourly Earnings:


Forex fundamental analysis the economics indicators13

FOREX Fundamental Analysis The Economics Indicators

- Hourly Earning Decrease U.S. Dollar will depreciate

- Hourly Earning Increase U.S. Dollar will appreciate


Forex fundamental analysis the economics indicators14

FOREX Fundamental Analysis The Economics Indicators

  • National Association Purchasing Manager (NAPM):


Forex fundamental analysis the economics indicators15

FOREX Fundamental Analysis The Economics Indicators

- NAPM Decrease U.S. Dollar will depreciate

- NAPM Increase U.S. Dollar will appreciate

  • The diffusion index can range between 0 and 100

    percent. With 50% implying no net change;

    above 50% suggesting improvement; and below

    50% represent a contraction.


Forex fundamental analysis the economics indicators16

FOREX Fundamental Analysis The Economics Indicators

  • Retail Sales:


Forex fundamental analysis the economics indicators17

FOREX Fundamental Analysis The Economics Indicators

- Retail Sales Decrease U.S. Dollar will depreciate

- Retail Sales Increase U.S. Dollar will appreciate

  • The normal range of retail sales 0.0% - 1.2%.

  • The normal range of retail sales ex-auto

    0.1% - 1.0%.


Forex fundamental analysis the economics indicators18

FOREX Fundamental Analysis The Economics Indicators

  • Home Sales:


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FOREX Fundamental Analysis The Economics Indicators

- Home Sales Decrease U.S. Dollar will depreciate

- Home Sales Increase U.S. Dollar will appreciate


Forex fundamental analysis the economics indicators20

FOREX Fundamental Analysis The Economics Indicators

  • Car and Truck Sales:


Forex fundamental analysis the economics indicators21

FOREX Fundamental Analysis The Economics Indicators

- Car & Truck Sales Decrease U.S. Dollar will depreciate

- Car & Truck Sales Increase U.S. Dollar will appreciate


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FOREX Fundamental Analysis The Economics Indicators

  • Consumer Confidence Measures:


Forex fundamental analysis the economics indicators23

FOREX Fundamental Analysis The Economics Indicators

- Consumer Confidence Decrease U.S. Dollar will depreciate

- Consumer Confidence Increase U.S. Dollar will appreciate


Forex fundamental analysis the economics indicators24

FOREX Fundamental Analysis The Economics Indicators

  • Personal Income and Consumption:


Forex fundamental analysis the economics indicators25

FOREX Fundamental Analysis The Economics Indicators

- Income & Consumption Decrease U.S. Dollar will depreciate

- Income & Consumption Increase U.S. Dollar will appreciate


Forex fundamental analysis the economics indicators26

FOREX Fundamental Analysis The Economics Indicators

  • Durable Goods Orders and Shipments:


Forex fundamental analysis the economics indicators27

FOREX Fundamental Analysis The Economics Indicators

- Orders & Shipments Decrease U.S. Dollar will depreciate

- Orders & Shipments Increase U.S. Dollar will appreciate


Forex fundamental analysis the economics indicators28

FOREX Fundamental Analysis The Economics Indicators

  • International Trade of Goods and Services:


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FOREX Fundamental Analysis The Economics Indicators

- Trade Balance Deficit Increase U.S. Dollar will depreciate

- Trade Balance Surplus Increase U.S. Dollar will appreciate


Forex fundamental analysis the economics indicators30

FOREX Fundamental Analysis The Economics Indicators

  • Unemployment Insurance Claim:


Forex fundamental analysis the economics indicators31

FOREX Fundamental Analysis The Economics Indicators

- Jobless Claims Decrease U.S. Dollar will appreciate

- Jobless Claims Increase U.S. Dollar will depreciate


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