Depends on principles in market research, both technical and fundamental. The concept of technical analysis is based on the statement that the relationship between demand and supply shown in the price chart relates to mathematical rules. According to fundamental analysis, the market changes under political, economic and financial factors.
Considering that fundamental problems evaluate the economic, financial and political nature, which directly or indirectly affect market development; in particular, the principle of economic indicators from the world’s leading economies that have an impact on the value of major currencies. PNB, GDP, inflation rate, unemployment rate, CPI and PPI Index, commodity and industrial price index, trade balance and balance of payments are the most significant indicators.
PNB is the main indicator for the national economic climate which includes characteristics such as consumption, investment, government budget, exports and imports. PNB is in direct proportion to the exchange rate: High GNP shows good economic conditions and foreign investment income, which in its role increases the demand for national currencies. Prolonged PNB growth can cause a decrease in inflation used to increase interest rates, as a result the demand for currencies continues to rise.
The unemployment rate shows the ratio between the authorized body and the unemployed population which ideally should not exceed the 6% scale. Increases in the unemployment level negatively affect the value of the currency – if it falls. Inflation has an impact that is similar to the value of a currency and can be measured by the rate of growth of a currency. With this inflation and unemployment indicators are in inverse proportion.
This analysis also includes events, which are important for the policies of different countries: elections, economic changes, implementation of international agreements, etc. The main financial factor considered by analysts is the key interest rate of the central bank which determines the total profitability of investment in a country’s economy. The growth of this indicator results in a favorable situation for the growth of the national currency.
In addition, national currency values are also affected by natural disasters, terrorist attacks, emergency situations, and other force majors.
Fundamental analysis, the difficulty of assessing a number of indicators in different countries, is done personally by qualified experts.