Fundamental analysis Part 1

Hi there. Welcome to this video which is fundamental analysis Part 1. This video is going to be an introduction for you on the road a fundamental analysis in the foreign exchange markets.
Of all fundamental analysis really revolves around the roles of central banks. Now all developed nations have a central bank and the central bank has a mandate to ensure both that country’s economic and price stability.
The monetary policy which is set by the central banks directly influences the currency. They’re a nation so central bank set the money supply to the nation. The interest rate targets, the required reserves and also they implement various currency measures.
So fundamental analysis can seem at first impenetrable and may be too complicated to grasp Ministry of Finance degree where the oil used to focus on is the core indicators that the central bank identified and thankfully this is quite simple because the bank has a set of core of four core indicators and they are as far fault follows. The four areas focus around production is the first of the four areas and production involves things like manufacturing, data housing, services, construction.
The second core factor is employment. How many people are earning and what age it, what wages are they and how many hours are a full time, part time employment. The next cool factor is growth. This is the most popular figure for growth, is the GDP which is the measure of a country’s total production and finally inflation and of these for growth and inflation are two of the most important indicators.
While inflation is the single most important area because inflation concerns how much the cost of goods and services goes up over time and the all central banks have either a specific or general inflation level that they’re trying to achieve. For example the Bank of England, currently has a specific inflation target of 2 percent. While the Reserve Bank of Australia has an inflation target in the range of 2 to 3 percent. So, in the next video which is one analysis part two. We will consider the tools. The central bank has to make sure they control inflation and maintain price stability.

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