Fundamental Analysis

No country in the world is self-sufficient. For this reason, governments engage in international trade to dispose of whatever is produced in abundance and acquire whatever an economy lacks. International trade between countries gives rise to a phenomenon commonly referred to as foreign exchange reserve. Foreign exchange reserves are assets or holdings held by a country in … [Read more...] about What Are Foreign Exchange Reserves? Role in Currency and Economy Stabilization

The economic calendar is a forex trader’s best friend, or so they say. Keeping abreast of events in the global economy is the hallmark of a successful trader. Among other things, the economic calendar keeps track of important reports and releases such as PMI. The PMI and other reports have a massive influence on market sentiment and, by extension, the market's risk … [Read more...] about PMI and Its Impact on Forex Trading

You are a serious forex trader if you spend a lot of time reading financial news outlets searching for actionable information. If you do so regularly, you might have come across stories about manufacturing data. Traders use the data to gauge the possible direction of the economy. This information is compiled into what experts call purchasing managers index (PMI). In the … [Read more...] about How Forex Traders Should Properly Utilize ISM Manufacturing Index

Economic bubbles leave behind a mess of carnage when they go kaboom. In the 21st century, the world of finance has already seen two major bubbles that have resulted in deep recessions after going burst. It is estimated that more than $5 trillion was wiped from the stock market after the Dotcom bubble popped in 2000.  Bubbles draw closer to popping when they turn … [Read more...] about Economic Bubbles from an Efficient Market Hypothesis’ Perspective

You are probably aware that central banks exist to manage the inflation rates in a given economy. You might also be aware that the rate of inflation that an economy records affects the rate at which it grows. What you might not know is that inflation and interest rates are joined at the hip. Interest rates make up the biggest force that influences the direction of the … [Read more...] about Interest Rates Move Markets, Here Is Why Forex Traders Should Care