Fundamental analysis is a method of analysis of the punitive (or observed) approach, which means that the indicators or global factors of a country / region such as: political economy, Monetary Affairs, politics, State political geopolitis, etc... Observations or fundamental analysis aims to understand that the State of the economy of a country or specific region can serve as a tool for predicting the evolution of the price of the currency of the country. But here the word "predictions" but still, we can not interpret it with the game. Here, the prediction is a clearly different meaning with the predictions in a money game.
FUNDAMENTAL FACTORS
There are a number of fundamental factors already mentioned. However, if one were to pick up all the fundamentals in a group, everything is collected in four broad categories or groups, namely: political factors, financial factors, economic factors and external factors.
Political factors: the political situation in a country or region can serve as one of the references or indicators to predict the movements of the exchange rate of the currency of the country/region. Political circumstances often affect policies produced by the Government. (Policies that smelled alleged policies). These policies would much later influence on the State of the internal market. Policy is also indirectly determines the entry and exit of investors, both foreigners, trade in markets. However, sometimes the political circumstances do not affect everything that is against the movement of the exchange rate of the currency.
Financial factors: healthy or if a country that starts from the budgetary and monetary policies of the country of the market conditions. The financial situation of the country is affected considerably by monetary policies and fiscal Deputy to his Government. Monetary and fiscal policy are not appropriate will have a significant impact on the State of the economy of the country. For example, the determination of the interest rate (interest rate). The interest rate of a country is the reference currency exchange rates concerned. Usually interest rates must be accompanied by a strengthening of the convertibility of its currency. In the account and the adjustment of interest rates, the Government already has elements or variables such as the level of inflation in it. Well, since the level of single the inflation we could find out if a country domestic market has a healthy situation.
External factors: perhaps, in former times, these external factors are not especially influential in the exchange rate of the currency of a country. However, when entered in the global era, in that investors, managers and funds more hadge puts their investment in a single country, but extends to a large number of countries, this factor becomes highly affect the State of the national market of a country or region. Changes in the economic situation of a country or region can do to affect other countries. This is because the volume of business of capital, changes in cash flows and the transfer of portfolio investors had done before. In addition, in this global age, we recognize already no limits to invest, so often the State of the economy of a country / region a bad impact in other countries or regions that were still a domain with the country. It is known as the regional impact (regional impact). Its simple regional impact is the impact caused by the allocation and portfolio transfer is carried out by foreign investors in order to make the situation of the market of the problematic countries.
Economic factors: this indicator is an indicator of the most important fundamental analysis for indi (so-called cool indicator) is an overview of all the key factors. All the factors mentioned above will be reflected in the economic situation of a country or region.
Economic factor contains all the elements of fundamental importance, in particular for economic sectors, such as:
GDP (gross domestic product) or the same meaning with a GDP (gross domestic product). GDP is the sum of all goods and services that come from the domestic market or within the country. They can refer to these products and services for domestic and foreign companies. While the company operates in a particular area of the country, while revenue will be recorded as the GDP of that country.
The GNP (gross national product) or in relation to the GDP (gross domestic product). Unlike GDP, BNP is the country's income comes from products total goods and services produced by its citizens, both inside and abroad.
Inflation rate: is one of the variables used in the calculation of the rate of interest (interest rate). Inflation has a definition of the rise in the price of the commodity which is relatively long (long term) and the effect can be extended. This means that the inflation rate is a measure or indicator of inflation development, growth that happens and is periodically measured over a given period. Inflation rate is also a reflection of the GDP and GNP (real) in the actual value that can be used as an indicator of fundamental analysis. Real GDP and GNI is often used as a comparison among investors the opportunities and risks of investment abroad.
In addition, there are other indicators of the inflation rate tends to be of concern for investors, namely:
PPI (price index the producer) or the index of prices to the producer is an index that measures the average change in prices received by domestic producers for any output generated at each level of the production process. He called on the PPI data of various economic sectors, including manufacturing, mining and agriculture.
IPC (price index) or the index of prices to the consumer is an index that is used to calculate the change in the retail selling price to produce all the goods and services which are produced by certain groups.
Balance of payments: balance of investors used to know the financial situation of the country, if the country had a deficit or a surplus. The balance of payments is also divided into two elements: trade balance and the balance of capital flows.
Unemployment rate: the Ratio between the number of jobs and residents who do not yet have a job/but still in productive age. These indicators describe the real economic conditions of a country. Countries with healthy economic conditions certainly has a low unemployment rate, and vice versa, if the economic conditions of a country are not healthy unemployment rate will tend to be high.
Exchange rate: an indicator of this is the a picture of the stability of a country's economy. Countries with good economy stability typically have stable currencies also movement. And the country with the bad economy, the stability of its currency moves are likely to be erratic and prone to decay.
PSNCR (need to net cash from the public sector) or the public sector, the Government cash flow requirements must meet the needs, financed by the loan or debt. These indicators are rarely aware of investors because it is very rarely the momentum created from this indicator.
This basic fact has a relationship, not only with Exchange rates, but also the price of shares, raw materials as petroleum, natural gas, gold, precious metals, etc.. It is only by the context in the forex is a currency then the fundamental debate in these writings, limited connection with the currency only.
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