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Economic Influences On The Market |
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Consumer Price Index (CPI)
This is the average level of prices on a fixed market basket of goods and services as purchased by consumers, excluding food and energy. This monthly report is widely followed as an inflation indicator. A longer term inflation problem will eventually undermine confidence in the currency and economic weakness will follow.
Durable Goods Orders
These are the new orders placed with domestic manufacturers for immediate and future delivery of factory hard goods. This is widely followed as an indicator of factory sector momentum. Rising orders are normally associated with stronger economic activity and can lead to higher short-term interest rates, which are often helpful to the currency.
Gross Domestic Product (GDP)
This quarterly report is the broadest measure of collective economic activity. GDP represents the total value of a country’s production and consists of the purchases of domestically produced goods and services by individuals, businesses, other countries and the government. GDP growth is generally seen the key indicator of the strength of economic activity. A high GDP figure is associated with the expectations of higher interest rates, which is frequently positive for the currency, unless expectations of increased inflation pressure weaken confidence.
Housing Starts
This is the number of residential units on which construction has begun each month and is tracked in order to evaluate the commitment of builders to new construction activity. High construction activity is usually connected with increased economic activity and confidence, and as such is considered a herald of higher short-term interest rates.
Payroll/Employment
This is the number of people being paid as employees by non-farm businesses and units of government. A monthly change in payroll/employment reflects the number of net new jobs created or lost during the month. Changes are an important indicator of economic activity, which could lead to higher interest rates, unless inflationary pressures are undermining the longer term confidence.
Producer Price Index (PPI)
This is the monthly reported average prices of a fixed basket of goods, excluding food and energy, received in primary markets by producers. This is seen as an indication of commodity inflation. A rising PPI is usually estimated to lead to higher consumer price inflation and thereby to potentially higher short-term interest rates, which have a positive impact on the currency, barring significant inflationary pressures demoralizing consumers.
Retail Sales
These are the total receipts of retail stores during a month’s time, excluding automotive sales. Changes in the monthly percentage reflect the rate of change of sales and are followed as an indicator of consumer spending. Retail sales are measured in nominal terms and include the effects of inflation. Rising retail sales are often linked with a strong economy and expectations for higher short-term interest rates.
Trade Balance
This is the difference between imports and exports of tangible goods and services, and is a major sign of foreign exchange trends. These are significant indicators of overall economic activity in the economy. A country with a substantial trade balance deficit has a weak currency due to sustained commercial selling of the currency. However, this can be offset by extended financial investment flows for long periods of time.
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| Symbol |
Rate |
| GBP:CHF |
2.007608 |
| GBP:JPY |
182.222212 |
| GBP:USD |
1.757198 |
| NZD:USD |
0.658397 |
| EUR:CAD |
1.503413 |
| EUR:CHF |
1.557680 |
| EUR:GBP |
0.775889 |
| EUR:JPY |
141.384148 |
| EUR:USD |
1.363390 |
| AUD:JPY |
80.415028 |
| AUD:USD |
0.775455 |
| USD:CAD |
1.102702 |
| USD:CHF |
1.142505 |
| USD:JPY |
103.700427 |
| USD:SEK |
7.185028 |
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Disclimer: This website is for informational purposes only and is not intended to provide
specific commercial, financial, investment, accounting, tax, or legal advice.
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© ForexCenter.com, 2005, All Rights Reserved
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