Foreign Exchange Trading FOREX Analysis Management Economic

Foreign Exchange Trading (FOREX): Analysis & Management Economic Indicators Prepared and presented by Dr. Ahmad Khasawneh

FOREX Fundamental Analysis The Economics Indicators q. 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. 2

FOREX Fundamental Analysis The Economics Indicators Ø 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 3

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 – 260 k per month. • Employment tends to grow 100 k faster during the rapid growth phase than the slower phase. • The significant unemployment rate change is about 0. 2 pp. 5

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 20 th day of the month Prior Quarter (for initial estimate of quarter) 6

FOREX Fundamental Analysis The Economics Indicators - GDP Decrease U. S. Dollar will depreciate - GDP Increase U. S. Dollar will appreciate • 0. 1 pp on a quarter to quarter basis is the minimum significant Variation. 7

FOREX Fundamental Analysis The Economics Indicators 3) Consumer Price Index (CPI): Market Significance Typical Released Time Period Covered High 03: 30 PM About the 10 th day of the month Prior Month 8

FOREX Fundamental Analysis The Economics Indicators - CPI Decrease U. S. Dollar will depreciate - CPI Increase U. S. Dollar will appreciate • The normal range of the CPI change lies between 0. 1% - 0. 5%. 9

FOREX Fundamental Analysis The Economics Indicators 4) Producer Price Index (PPI): Market Significance Typical Released Time Period Covered High 03: 30 PM About the 10 th day of the month Prior Month 10

FOREX Fundamental Analysis The Economics Indicators - PPI Decrease U. S. Dollar will depreciate - PPI Increase 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 1 st month of the new quarter 12

FOREX Fundamental Analysis The Economics Indicators - ECI Decrease U. S. Dollar will appreciate - ECI Increase 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 Prior Quarter 1 st Friday of the month 14

FOREX Fundamental Analysis The Economics Indicators - Hourly Earning Decrease U. S. Dollar will depreciate - Hourly Earning Increase 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 16

FOREX Fundamental Analysis The Economics Indicators - NAPM Decrease U. S. Dollar will depreciate - NAPM Increase 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. 17

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 18

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%. 19

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 20

FOREX Fundamental Analysis The Economics Indicators - Home Sales Decrease U. S. Dollar will depreciate - Home Sales Increase U. S. Dollar will appreciate 21

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 22

FOREX Fundamental Analysis The Economics Indicators - Car & Truck Sales Decrease U. S. Dollar will depreciate - Car & Truck Sales Increase 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 24

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 10 th 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 10 th business day of the month 28

FOREX Fundamental Analysis The Economics Indicators - Orders & Shipments Decrease U. S. Dollar will depreciate - Orders & Shipments Increase 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 30

FOREX Fundamental Analysis The Economics Indicators - Trade Balance Deficit Increase - Trade Balance Surplus Increase U. S. Dollar will depreciate 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 U. S. Dollar will appreciate - Jobless Claims Increase U. S. Dollar will depreciate 33