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Fundamental Analysis

Fundamental analysis is the analysis and evaluation of the economic situation of a given entity and a means to help forecast the intrinsic value of a particular investment.

Fundamental analysis depends on the theory that States that the market price for a particular bond tends to move to the core value of any real value.

The fundamental analysis predicts the rate of a particular origin and orientation in the market depending on current economic conditions, government policies, wars and social conditions within the business cycle.

Forex traders will depend on analysis of the economic situations of many countries, inflation rates, trade balances, job growth, GDP along with Central Bank rates. Based on the results of this data be trader in connection with evaluating these States and economy Spa trading on the local currency.


Here are the most powerful economic fundamentals in the market:

  • * Interest rate: in General, the more a particular State of interest rate has the stronger local currency, and vice versa, the higher interest rates for that specific state. Merchants convert their investments to the State to take advantage of higher returns.
  • * GDP: we at KLMFX monitor the GDP per State closely, when a State submits higher interest rates indicating a strong economy this naturally translates to stronger currency.
  • * The employment and unemployment rates: naturally the measure of employment and unemployment rates in a particular State plays an essential role in the economic power of this State, which greatly encourages investments in currency, and vice versa, simultaneously the lower the unemployment rates in a particular state directly influences reduction of interest rates and weakening of local currency. significantly
  • * Trade Balance: overall, negative trading balance in large currency significantly weakens interest rates. Selling large amounts of currency causes continuous loss of balance this sometimes leads to dramatic collapse of currency.


As mentioned above, all these fundamental economic analyses apparatus help merchants to study the economy conclusively,

which gives sufficient experience to make an informed decision in State currency speculation.

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