Fundamental analysts should be in tune with the mechanics of the foreign exchange market, particularly the underlying economic factors that drive each country, as well as each currency.
In the next several pages, we’ll explain, in order of the country’s importance to the foreign exchange market, the important tidbits you need to know about each country. Understanding these central themes will allow you to make sense of the foreign exchange market, and better predict currency prices.
In general, fundamental analysts need to know about:
• Important sectors and industries for each country.
• The country’s central bank and monetary policy architecture
• Important economic releases and fundamental news sources
• What makes the currency rise or fall in value
The following articles are from a high-level perspective. We emphasize that investors will have a very good idea of how each economy works from reading about each country, but that at no point should these be a substitute for careful, timely analysis. In the world of economics and currency trading, small happenings matter.
Analysts who read the following lessons and continue their education with quality news sources will fair better than most on the foreign exchange market.