Foreign Exchange Trading (FOREX):
Analysis & Management
Economic Indicators
Prepared and presented by
Dr. Ahmad Khasawneh
FOREX Fundamental Analysis
The Economics Indicators
Analyzing the data:
– Evaluating data changes (over time, compared
to the market participant forecast, relative to the
business cycle, compared to previous periods
average, normal range).
– Assessing whether the data change is
significant or not.
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FOREX Fundamental Analysis
The Economics Indicators
 U.S. Economics Statistics:
1) Unemployment: is the percentage of the
unemployed people to the total labor force in
the economy.
Market
Typical
Period Covered
Significance
Released Time
Very High
03:30 PM
Prior Month
First Friday of
the month
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FOREX Fundamental Analysis
The Economics Indicators
- Employment Decrease
- Unemployment increase
U.S. Dollar
will depreciate
- Employment Increase
- Unemployment Decrease
U.S. Dollar
will appreciate
4
FOREX Fundamental Analysis
The Economics Indicators
• Employment tends to grow the fastest
during the recovery phase of the cycle –
260k per month.
• Employment tends to grow 100k faster
during the rapid growth phase than the
slower phase.
• The significant unemployment rate change
is about 0.2pp.
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FOREX Fundamental Analysis
The Economics Indicators
2) Gross Domestic Product (GDP):
Market
Significance
Typical
Released Time
Period Covered
Very High
03:30 PM
About the 20th
day of the
month
Prior Quarter
(for initial estimate of
quarter)
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FOREX Fundamental Analysis
The Economics Indicators
- GDP Decrease
- GDP Increase
U.S. Dollar will depreciate
U.S. Dollar will appreciate
• 0.1pp on a quarter to quarter basis is the minimum
significant Variation.
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FOREX Fundamental Analysis
The Economics Indicators
3) Consumer Price Index (CPI):
Market
Significance
Typical
Released Time
Period Covered
High
03:30 PM
About the 10th
day of the
month
Prior Month
8
FOREX Fundamental Analysis
The Economics Indicators
- CPI Decrease
- CPI Increase
U.S. Dollar will depreciate
U.S. Dollar will appreciate
• The normal range of the CPI change lies between
0.1% - 0.5%.
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FOREX Fundamental Analysis
The Economics Indicators
4) Producer Price Index (PPI):
Market
Significance
Typical
Released Time
Period Covered
High
03:30 PM
About the 10th
day of the
month
Prior Month
10
FOREX Fundamental Analysis
The Economics Indicators
- PPI Decrease
- PPI Increase
U.S. Dollar will depreciate
U.S. Dollar will appreciate
• The normal range of the CPI change lies between
0.0% - 0.5%.
11
FOREX Fundamental Analysis
The Economics Indicators
5) Employment Cost Index (ECI):
Market
Significance
Typical
Released Time
Period Covered
Moderate
03:30 PM
Prior Quarter
Last Thursday of the
1st month of the new
quarter
12
FOREX Fundamental Analysis
The Economics Indicators
- ECI Decrease
- ECI Increase
U.S. Dollar will appreciate
U.S. Dollar will depreciate
• The average quarterly increase in the ECI was
1.2% and 1.4% in the recession and recovery,
and 1.1% in the expansion.
13
FOREX Fundamental Analysis
The Economics Indicators
6) Average Hourly Earnings:
Market
Significance
Typical
Released Time
Period Covered
Moderate
03:30 PM
1st Friday of
the month
Prior Quarter
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FOREX Fundamental Analysis
The Economics Indicators
- Hourly Earning Decrease
- Hourly Earning Increase
U.S. Dollar will depreciate
U.S. Dollar will appreciate
15
FOREX Fundamental Analysis
The Economics Indicators
7) National Association Purchasing Manager
(NAPM):
Market
Significance
Typical
Released Time
Period Covered
High
03:30 PM
Prior month
First day of the
month
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FOREX Fundamental Analysis
The Economics Indicators
- NAPM Decrease
- NAPM Increase
U.S. Dollar will depreciate
U.S. Dollar will appreciate
• The diffusion index can range between 0 and 100
percent. With 50% implying no net change;
above 50% suggesting improvement; and below
50% represent a contraction.
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FOREX Fundamental Analysis
The Economics Indicators
8) Retail Sales:
Market
Significance
Typical
Released Time
Period Covered
High
03:30 PM
Mid of the
month
Prior Quarter
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FOREX Fundamental Analysis
The Economics Indicators
- Retail Sales Decrease
U.S. Dollar will depreciate
- Retail Sales Increase
U.S. Dollar will appreciate
• The normal range of retail sales 0.0% - 1.2%.
• The normal range of retail sales ex-auto
0.1% - 1.0%.
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FOREX Fundamental Analysis
The Economics Indicators
9) Home Sales:
Market
Significance
Typical
Released Time
Period Covered
Moderate
04:00 PM
Prior Quarter
Near the end of
the month
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FOREX Fundamental Analysis
The Economics Indicators
- Home Sales Decrease
U.S. Dollar will depreciate
- Home Sales Increase
U.S. Dollar will appreciate
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FOREX Fundamental Analysis
The Economics Indicators
10) Car and Truck Sales:
Market
Significance
Typical
Released Time
Period Covered
Moderate
Between the
first and third
day of the new
month
Prior Month
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FOREX Fundamental Analysis
The Economics Indicators
- Car & Truck Sales Decrease
- Car & Truck Sales Increase
U.S. Dollar will depreciate
U.S. Dollar will appreciate
23
FOREX Fundamental Analysis
The Economics Indicators
11) Consumer Confidence Measures:
Market
Significance
Typical
Released Time
Period Covered
Moderate
05:00 pm last
Tuesday of the
month
Prior Month
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FOREX Fundamental Analysis
The Economics Indicators
- Consumer Confidence Decrease
U.S. Dollar will depreciate
- Consumer Confidence Increase
U.S. Dollar will appreciate
25
FOREX Fundamental Analysis
The Economics Indicators
12) Personal Income and Consumption:
Market
Significance
Typical
Released Time
Period Covered
High
03:30 PM
About the 10th
day of the
month
Prior Month
26
FOREX Fundamental Analysis
The Economics Indicators
- Income & Consumption Decrease
U.S. Dollar will depreciate
- Income & Consumption Increase
U.S. Dollar will appreciate
27
FOREX Fundamental Analysis
The Economics Indicators
13) Durable Goods Orders and Shipments:
Market
Significance
Typical
Released Time
Period Covered
Moderate up to 03:30 PM
Prior Month
High
around the 10th
business day of
the month
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FOREX Fundamental Analysis
The Economics Indicators
- Orders & Shipments Decrease
- Orders & Shipments Increase
U.S. Dollar will depreciate
U.S. Dollar will appreciate
29
FOREX Fundamental Analysis
The Economics Indicators
14) International Trade of Goods and Services:
Market
Significance
Typical
Released Time
Period Covered
Moderate
03:30 PM
Third week of
the month
Prior two
month
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FOREX Fundamental Analysis
The Economics Indicators
- Trade Balance Deficit Increase
U.S. Dollar will depreciate
- Trade Balance Surplus Increase
U.S. Dollar will appreciate
31
FOREX Fundamental Analysis
The Economics Indicators
15) Unemployment Insurance Claim:
Market
Significance
Typical
Released Time
Period Covered
Moderate
03:30 pm
Prior Week
Every Thursday Ending Saturday
32
FOREX Fundamental Analysis
The Economics Indicators
- Jobless Claims Decrease
- Jobless Claims Increase
U.S. Dollar will appreciate
U.S. Dollar will depreciate
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