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7/26
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GOOD MORNING ALL.
Hi all my friends this month I have decided to analyse the NEW Zealand Dollar as I saw it has witnessed a free fall against all its counter parts. I am trying to find out what are the possible reasons and and from here what are the prospects for its future growth.
In the fundamental factors let's have a look at GDP, INFLATION RATE TRADE BALANCE and UNEMPLOYMENT RATE which affects currency value.
GDP OF NEW ZEALAND:
In the first quarter of 2018 New Zealand GDP has shown a growth of 0.6% which is same as 0.6% of last quarter of 2017.
In the contributing factors breakdown is as follows.
  • Service industries shown a growth of 1.1 percent, driving economic growth.
  • Primary industries weakened, down to 2.4 percent.
  • Capital goods also shown rise thus lifting investment.
  • GDP per capita shown a rise of 0.1 percent.
  • Real purchasing power of New Zealand’s income rise up to 1.4 percent.

Pie Diagram representation of contributing factors.

Year-on-Year and Quarter-on-Quarter comparison of GDP numbers.

Breakdown of GDP components.
INFLATION IN NEW ZEALAND:
In first quarter of 2018 CPI in New Zealand fell to 1.1% from 1.6% of last quarter of 2017. In the components housing and other ho…
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Vlad73 avatar
Vlad73 30 May

very good

FE_GMTplus10 avatar

Good job.

Diana29 avatar
Diana29 31 May

Спасибо)) Статья супер)

Chilli avatar
Chilli 31 May

good article !

Yesa avatar
Yesa 31 May

Great job

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22/26
Ranking
Multiplier effects exist in the economy because a dollar saved is a dollar earned, but a dollar spent that doesn’t get consumed grows. For example, when a film goes into production, most of the financing is done with pre-tax dollars that are sold to free investors at a discount. The incentive is the tax savings. It’s hard to say how the investment is creating a specific multiplier, but it is well understood that these local tax savings create pockets of spending where the production is shot. Let’s say a film has just received a local grant or stipend of $10,000. This money will be spent almost entirely in the local region where the film set is at. If the production goes to Germany, which is common due to good tax incentives, that money is exchanged for £8,300 and spent in the location of where the film is being produced, in this case, somewhere in Germany. That is a new injection of cash, which goes into the entire cycle of a multiplier for consumption. One important part of the divisor for calculating the multiplier is the “Marginal Propensity To Consume”. The multiplier for consumption is calculated as follows: Let’s say the marginal propensity to consume is equal to 95% of a sin…
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NAG avatar
NAG 15 May

отличная статья)))

pshan avatar
pshan 16 May

Thanks!

AAAnya avatar
AAAnya 19 May

Thanks for sharing)

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9/40
Ranking

Definition and Economic forecasting

  • Fundamental analysis can be defined as the study of country’s economic and financial performance in order to determine the fair market value and future direction of its currency.
  • Fundamentals focus on factors that determine exchange rates, such as countries’ economic health, political stability and environmental events.
  • A popular way to gauge the health of countries’ economy is through looking at its economic indicators and data releases, which is why every trader should be familiar with them and how they influence the value of a currency.
  • If the European economy is doing better/worse than American economy then we expect EURUSD price to go up/down.
  • Our target is to evaluate how well the economies in question are doing, and find which currency will appreciate/depreciate.
Macroeconomic Indicators
  • Interest Rates
  • Inflation
  • Gross Domestic Product – GDP
  • Unemployment
  • Trade Balance

Pic 1 - Major Indicators which can move the currency pairs

Interest Rates

[list][/list]…
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Anetta_Kliueva avatar

Oh great artice!! Thanks=)))

_shokolad_ avatar
_shokolad_ 25 Aug.

Good job!))

krabik avatar
krabik 15 Sep.

Good

LoockasFX avatar
LoockasFX 19 Sep.

интересно!!!

klintons avatar
klintons 9 Mar.

Gute Artikel

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13/33
Ranking

Abstract The US GDP announcements are investigated using a 1 min. chart for spot Euro-Sterling exchange rates. A trading strategy is tested for the GDP/USD to take economic advantage of these relevant releases.The results of each individual tested macroeconomic announcement is described in function of the volatility, the profit and the difference between the forecast and the release values. The results suggest that the strategy respond in a statistically significant manner to the US GDP releasing information reported by the U.S. Bureau of Economic Analysis. The efficiency of the strategy is correlated to the relevant differences between the ex ante and ex post volatility.This study utilises the data for Euro-Sterling provided by the Dukascopy Platform.
Keywords US, GDP, forex strategy, hedging strategy, Cable, GBP/USD. Introduction
Foreign exchange (FX) volatility is correlated to notable macroeconomic announcements as they provide information on the overall state of the countries economy as indicated on the works of Luc Bauwens, Walid Ben Omrane, Pierre Giot.This can result in changes in FX rates as market participants change their positions.The interest in FX volatility pa…
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Daytrader21 avatar

Very well written and I'm very impressed by the high level of information, however there is one thing that this strategy doesn't take in consideration, which is the spread and as rokasltu has already mentioned it can Very well written and I'm, very impressed your strategy can be negatively skewed.

marius24 avatar
marius24 30 Dec.

Hope this strategy will help you to earn some money. Good luck

khalidamassi avatar

seemed useful article, rich with figures and tables,but in real accounts scalping during strong news like US GDP is not easy, due to quick up, down movement it is not warrant that the order will be activated or closed according to your entries.at all, you have strong article and should compete here.

al_dcdemo avatar
al_dcdemo 31 Dec.

As some readers have pointed out, and from own experience, news trading is no easy task for retail traders due to increased slippage and spread. So in my opinion it is absolutely vital to incorporate these two parameters into strategy. Very well written article.

Stix avatar
Stix 4 Jan.

Thank you so much... I thought it was very well written and useful. :) :)

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21/46
Ranking
The highly anticipated FED tapering over last months is taking shape with economic data, markets will prepare for the same. The
economic data which indicates economic health is analysed below. Strong numbers from various economic indicators would be deciding factor for FED’s Taper/ No Taper.
The key, critical economic indicators for analysis of any country economic health are
GDP growth rate
Unemployment rate
Inflation rate
The supporting economic indicators to boost further confidence in country economy health are
Current Trade Balance
Retail Sales
New home sale.
FED’s purchase program of USD 85 million per month has to end in coming months, it is interesting to make a note how it will come to end, either reducing pace or at one go both the possibilities are possible.
We will take a look at all the above key as well as supporting indicators to analyse the current situation of US economy.
GDP Growth Rate

GDP growth rate is on rise since beginning of year 2013, it has rose from 0.1 to 3.6% indicating a strong recovery is on the way, next
couple of months it should stabilize.
Unemployment Rate
Unemployment Rate is decreasing on steady basis since Jan 2013, strong jobs market is sig…
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Daytrader21 avatar

I have also wrote an article about the tapering odds but I'm speaking from another point of view in my own article, however your perspective is very solid, nice job

alifari avatar
alifari 11 Dec.

Nice article, well done +

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10/38
Ranking
Is the application of micro and macro economic theory in markets in order to predict future trends. The main fundamental forces drive the currency markets._____________________________________________________________________________Trade Balance (Balance of Trade in Goods):The Trade Balance is an indicator of the difference between exports and imports of goods from one country. A positive trade balance or a surplus occurs when a country's exports exceed imports. A negative balance of trade, or a deficit, occurs when more goods are imported than exported.The Trade Balance and any changes in exports and imports are closely followed by foreign exchange markets, as it is an important indicator of foreign exchange trends. Measurements of imports and exports are important economic indicators of global economic activity. Trends in export activity not only reflect the competitive position of the country in question, but also the strength of economic activity abroad. Trends in import activity reflect the strength of national economic activity. A country with a significant deficit of the trade balance will normally have a weaker currency because there will be a continuous commercial sale of …
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dada123 avatar
dada123 27 June

Excellent material :-)

Faster avatar
Faster 28 June

Excellent....

Pisakjanos avatar
Pisakjanos 28 June

Good work. Just keep it this way.

Decebal avatar
Decebal 30 June

good work!

WallStreetBlog avatar

Thank you very much!!!

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22/35
Ranking
Role of Central Banks in Currency rates This article is to shed a few things about the roles of various central banks in controlling currency rates. If we go deeper in understanding the working compulsions of CBs, it will be amazing that every other Bank is using different tools for the same purpose. The main role of Central Bank of the country is to control monetary policy and regulate Banks and other financial institutions as well as to keep the currency rates stable. China doesn’t float free float currency, namely Yuan or Renminbi . Daily before market opens, PBOC ( Peoples Bank of China ) fixes the Rate to USD in line with International market conditions with a price band fluctuation control of 1% per day, on both sides. If letting their own, CNY into free float, it will appreciate minimum 15-20% at once, due to economic fundamental comparison between China and US. China’s GDP growth is around 9% where US is hobbling around 3%. Overnight all the exporters will sign and being one of the top economy in the world, it will lead to chaos in local market and may even lead to a stage like Japan, which is struggling to beat the appreciation of Yen. As all the readers are clos…
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Nicco avatar
Nicco 17 Jan.

After reading your article It would be interesting to discuss the role of the market in currencies rates and, especially about who is the price maker finally: the Central Banks OR the Market, the Central Bank AND the Market, ONLY Central Banks, ONLY the Market...???

sengeevenindia avatar

yes! That is the big question! today the biggest winner and who have very broad smile is SNB! They bought billions of Euros to defend the EUR/CHF floor at 1.2. During this period and even after EUR/CHF hitting 1.25, there are some in the market , expecting and fuelling that SNB should lift the floor to 1.25 or even to 1.3. But that is far fetched in my opinion. This climb will help SNB to relax a bit and they would never test the market with higher floor as that will be that much difficult to defend the higher floor!

sengeevenindia avatar

Moving to BOJ, already Koichi Hamada, a special economic adviser to Abe has stated that YEN at 95-100 is OK and only problematic if it reaches to 110. Already some eyes are brewing with the sudden slump of the YEN. Especially South Korea and Russia in G20 have started rising voices of unavoidable currency war in 2013. Even US exporters started urging Obama to check YEN's fall as it will be detrimental to their business. So Satisfying one and all in the market as well as to look after the Own Economy, Every other Central Banks need to devise different tools to combat same problem!

ante777 avatar
ante777 21 Jan.

Today important news coming from BOJ. Will see. Good article.

SpecialFX avatar
SpecialFX 29 Jan.

I wouldn't really agree that the strong CHF has ruined Switzerland, like the Yen did to Japan. Japan has had roughly 20 years of slow growth, or even recession with deflation, but Switzerland has been doing great, with only a couple of bad years in that time :) Hope to read your next article on the subejct. BTW, this is fresh news, the RBI has cut interest rates about an hour ago!

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9/35
Ranking
Introduction: QE stands for Quantitative easing, A tranche of Monetary policy employed by Central Banks to Lower interest rates and in turn boost the economy. In short, this is achieved by the New money being used to buy financial assets likes bonds or Mortgage backed securities (MBS) which with a rising price forced on by the relentless buying will force the yield lower. A great article explaining more about QE can be found here by Scramble. This method has been used a handful of times in economic history, notably by the Bank of Japan a decade ago when they faced the possibility of a Keynesian liquidity trap and deflation. However in the last 5 years it has been used by the US, UK, and the Eurozone. In the US, there have been 3 rounds of QE, it first came about right after the financial crisis in late 2008 at which point the Federal Reserve started purchasing MBS’s. Alongside cutting the base rate to almost zero, it increased its balance sheet by around $1.4 Trillion. Then in late 2010 it came out with QE2 with an aim to buy $600 Billion of treasuries. Most importantly is in the last few days – 13th September – the Federal Reserve announced “QE3” "To support a stronger economic…
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Tsandes avatar
Tsandes 22 Sep.

Great article! Good luck I hope for the best.

alifari avatar
alifari 24 Sep.

good read

LinnuxFX avatar
LinnuxFX 26 Sep.

Nice article, good new start, hope you keep your articles at your best level...

captain avatar
captain 27 Sep.

Very imformative article.

doctortyby avatar
doctortyby 27 Sep.

US QE3 Infinity... Hyperinflation

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22/35
Ranking
INTRODUCTION While the whole world's attention is about a possible Greek default, Spain's debts and about US QE3, I moved my attention in something else: ITALY.This article is a photograph of actual Italian economic and political situation to give a summarized overview in one of the most important European countries, and eventually understand what could happen in the near future. OVERVIEW Basically, Italian economy is driven by manufacture of high-quality consumer goods produced by small and medium sized enterprises (most of them are family owned). This is true in northern Italy but when talking about southern, we find more agricultural and welfare-dependent economy, and this is one of the main factors of the current difficulties in the management of national resources, tax revenue and also the management of public expenditure. In other words, southern Italy participates to a lesser extent tax revenues, resulting in a much heavier burden on northern businesses.There is an important underground economy, estimated in about the 15-16% of GDP (I would say something more): main part of this underground activity is found in agricultural and constructions sectors but we find a good port…
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SpecialFX avatar
SpecialFX 14 Sep.

I dont know if this has already been implemented or not, but Italy definitely needs a more flexible labor market, far too many regulations and barriers in some industries. Thats not the way to attract investment and create new jobs. In some ways this reminds me a lot of Portugal, we also have (or had) an extremely rigid labor market, but fortunately some reforms are being implemented, they will take time to have any positive effect though...

scramble avatar
scramble 14 Sep.

yes i agree. indeed the situation is not certainly good IMo. with next article i will go deep into politics, what they did, what they are doing ... etc... actually the research about is not showing anything good.

doctortyby avatar
doctortyby 27 Sep.

I think that Italy still has a chance in comparison with Spain. Just watch the latest headlines

scramble avatar
scramble 27 Sep.

I hope so :)

scramble avatar
scramble 28 Sep.

@doctor: of course..... i hope things will get better also in spain!! have a lot of friends in Bcn and Madrid! about italy we need next government to be a great one. still a dream....

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21/41
Ranking
  INTRODUCTIONWith my previous article I introduced a study about the policy done in last years by central banks: the purpose was to analyze the impact into stock markets (since correlated with forex) to better understand the current situation and possible developments in the coming days/weeks. With this article I will show my study about U.S. monetary policy, the impact occurred in some world markets, and my attempt to understand whether this policy has produced the desired effect or not. QUANTITATIVE EASINGAs previously underlined, QE is an unconventional monetary policy used by central banks to stimulate the national economy when conventional policy has become ineffective. When I read this sentence for the first time, I thought that in any other circumstance in which this type of expression is used, it simply means that the situation is far more serious than you think, and normally any kind of extreme solution will cause serious damage in some other macro/micro systems directly or indirectly connected.In our contemporary history, this type of policy has been introduced (and widely used) by the American central bank (FED) with a 2 trillion dollars (12 zeros) of new money created…
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scramble avatar
scramble 22 Aug.

yes i said about other conditions. anyway whole commodities have the same charts. almost a copy n paste. can't be only weather ;)

SpecialFX avatar
SpecialFX 26 Aug.

QE increases money supply, but if you have more money chasing the same amount of goods then the price of those goods will go higher (or at least not go as low as they should without QE). Producing goods and services is what creates wealth, not printing money. If everyone was given 1 million euros we would all be poor, because hyperinflation would make those euros worthless and we would have a huge recession :)

scramble avatar
scramble 31 Aug.

hello, sorry didn't notice your comment here! yes wh

scramble avatar
scramble 31 Aug.

unable to post comments.

fxigor avatar
fxigor 26 Oct.

Nice article about QE and correlations.I wrote article about it and I use correlations in my statistical arbitrage trading strategy. Correlations between the USD and 6 major world currencies in last several years went down. Do you use correlations in your own trading strategy? Thank you.

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23/53
Ranking
Firstly, the upcoming week is on the back of a breakout week with the Yen getting hammered, Euro rising substantially as with CHF. Other than that, most other Currencies remained fairly flat.Against the dollar, the strongest performers were;CHF up 2.62%EUR up 2.33NZD up 0.49%GBP up 0.33%AUD down -0.07%CAD down -0.26%and the big loser JPY down -2.04%.The following week for risk appetite could be very consolidative and the fundamentals could be the biggest driver this week.In this Article I will run through the top 5 scheduled news releases of the next week or that in my opinion will have the biggest impact.1.) CB consumer confidence - Provided by the confidence board where 5,000 households are asked about their opinions on the current and future rate of economic conditions.This is due to be released at 15:00 GMT on Tuesday 28th Feb. An above estimate print gives traders the belief that consumers are more confident and therefore are more willing to spend and improve the economy.Last month we saw an undershoot on the print with 61.1 against estimates of 68.2, and subsequently saw risk-off for the rest of day and in the few minutes preceding EURUSD dropped 25 pips, and 100 pip fall ove…
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FX_Swingtrader avatar

Nice work. I hope next week will be just as good.

masterfxtrader avatar

I like your style towards news etc. I hope you find it profitable.

Vcardozo avatar
Vcardozo 7 Mar.

good

Ltjere avatar
Ltjere 17 Mar.

Some nice work here. Adds a news side to trading with news. Well done.

marius24 avatar
marius24 23 Mar.

hope to see you much higher bro

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