Fundamental Analysis - Economic Indicators

{}Posted in2023/2/25 9:23:39 | 7Browse

Gross Domestic Product (1) The mean ForexrebateforExnessg of Gross Domestic Product (GDP) Forex rebate for Exness the value of all final goods forexcashrebate services produced in the economy of a country or region in a certain period of time (a quarter or a year), often It is often recognized as the best indicator of a countrys economic situation. It not only reflects a countrys economic performance, but also reflects a countrys national strength and wealth. X is the net exports of a country or regions economy is in the growth or recession phase, from the change of this figure can be observed in general, GDP is published in two forms, the total and the percentage forexrebates as the unit of calculation when the GDP growth figure is positive, that is, the regions economy is in the expansion phase; on the contrary, if in a negative number, that is, the regions economy into a period of recession Since GDP is a figure obtained by multiplying the total amount of goods and services produced in a certain period of time by the price of money or market price, i.e. nominal GDP, the nominal GDP growth rate is equal to the sum of the real GDP growth rate and the inflation rate, therefore, even if the total output does not increase, but only the price level rises, the nominal GDP will still rise, and in the case of price increase, the nominal GDP will still rise. However, it is the real GDP rate of change that has a substantial impact, so the GDP indicator must be adjusted for nominal GDP through the GDP deflator in order to accurately reflect the real change in output. A significant increase in the GDP deflator will have a negative impact on the economy and is a precursor to tighter money supply, higher cashbackforexexness rates, and thus higher foreign exchange rates (2) GDP interpretation A significant increase in a countrys GDP reflects the countrys booming economy, increased national income, and increased spending power. In this case, the central bank of the country will be likely to raise interest rates and tighten the money supply, the countrys good economic performance and rising interest rates will increase the attractiveness of the countrys cashback forex. For example, from 1995 to 1999, the average annual growth rate of U.S. GDP was 4.1%, while the GDP growth rates of major countries such as France, Germany and Italy were only 2.2%, 1.5% and 1.2%, much lower than the U.S. level. U.S. levels which prompted the euro to decline against the U.S. dollar since its launch on January 1, 1999, depreciating by 30% in less than two years But in reality, the impact of economic growth rate differences on exchange rate movements is multifaceted: first, a high economic growth rate in a country means higher income and higher levels of domestic demand, which will increase the countrys imports and thus lead to a current account deficit, which, in turn, will Second, if the countrys economy is export-oriented, economic growth is to produce more exports, the growth of exports will compensate for the increase in imports, slowing down the pressure on the exchange rate of the national currency down Third, a countrys high economic growth rate means that labor productivity increases quickly, lower costs improve the competitive position of domestic products and help to increase exports and suppress imports, and economic growth rate High economic growth rate makes the countrys currency in the foreign exchange market is bullish, so the countrys currency exchange rate will have an upward trend in the United States, the Department of Commerce is responsible for the analysis of statistics, the practice is to estimate and statistics once a quarter each time after the release of preliminary estimates (ThePreliminaryEstimates), there will be two revisions to the release (TheFirstRevision) If there is an increase, it means that the economy is faster, which is favorable to the appreciation of the currency; if there is a decrease, it means that the economy is slowing down and the currency is under pressure to depreciate. The economic development is healthy, above this level indicates that there is inflationary pressure; below 1.5% growth, it shows that the economy is slowing down and there are signs of recession interest rate (1) the meaning of interest rate interest rate, in its manifestation, is the ratio of the amount of interest to the total amount of borrowed capital in a certain period of time For many years, economists have been working to find a set of interest rates that can fully explain the interest rate. In the search for a theory that can fully explain the structure and changes in interest rates, the classical school believes that the interest rate is the price of capital, and the supply and demand for capital determines the change in interest rates; Keynes saw the interest rate as the cost of using money Marx believed that the interest rate is part of the surplus value, a manifestation of the participation of borrowing capitalists in the distribution of surplus value Interest rates are usually controlled by the central bank of the country, in Nowadays, all countries use interest rates as one of the important tools of macroeconomic regulation. When the economy is overheated and inflation is rising, interest rates are raised and credit is tightened; when the overheated economy and inflation are under control, interest rates are adjusted down appropriately. We know that the exchange rate is the relative price between the currencies of two countries and the pricing mechanism of other commodities, it is determined by the supply and demand in the foreign exchange market foreign exchange is a financial asset, people hold it, because it can bring capital theft people in the choice is to hold the national currency, or hold a foreign currency, the first is to consider which to hold When people choose whether to hold their own currency or a foreign currency, they first consider which currency will give them a greater return. The rate of return of each countrys currency is measured by the interest rate of its financial market. If the interest rate of a currency rises, the interest income of holding that currency increases, attracting investors to buy that currency and therefore supporting the currency favorably; if the interest rate falls, the return of holding that currency decreases and the attractiveness of that currency is weakened. Interest rates fall, the currency is weak from the economic sense, in the foreign exchange market equilibrium, holding any two currencies should bring equal returns, which is: Ri = Rj (interest rate parity conditions) Here, R represents the rate of return, i and j on behalf of different countries currencies If holding two currencies brings unequal returns, it will produce arbitrage: buy A foreign exchange, and sell B foreign exchange this arbitrage, there is no Any risk thus once the yields of the two currencies are not equal, the hedging mechanism will prompt the yields of the two currencies to be equal, that is, the interest rates of different national currencies inherently have a tendency and tendency to equalize, which is a key aspect of the impact of interest rate indicators on the direction of foreign exchange rates, and is also the key to our interpretation and grasp of interest rate indicators For example, after August 1987, as the dollar fell, people scrambled to Buy the pound, a high-interest currency, resulting in a very short period of time the pound exchange rate rose from $1.65 to $1.90, an increase of nearly 20% in order to limit the rise of the pound, in May-June 1988, the United Kingdom reduced interest rates several times in a row, from 10% to 7.5% annual interest, along with each interest rate cut, the pound will fall but because of the rapid depreciation of the pound, inflationary pressure, followed by the Bank of England Forced to raise interest rates several times, the pound exchange rate began to gradually rebound again

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