Course 7 Intermediate

Fundamental Analysis

Why central banks, inflation, employment and growth move currencies, and how to read an economic calendar.

0 of 14 lessons

Module 1: The big picture

1
What Is Fundamental Analysis?
Fundamental analysis is the study of the economic forces that decide what a currency should be worth: interest rates, growth, inflation, employment, trade and...
2
Economic Cycles and Market Expectations
Economies move through cycles of expansion, peak, contraction and recovery, and currencies tend to strengthen during expansions that bring rate rises and...

3
Interest Rates and Monetary Policy
Monetary policy is how a central bank manages the supply and cost of money, mainly by setting the short-term interest rate that commercial banks pay to borrow...
4
Inflation, Tightening and Easing
Inflation is the rate at which prices rise, and it is the number central banks are most directly charged with controlling, usually to a target of about 2...
5
Forward Guidance
Forward guidance is what a central bank says about its future policy: whether it expects to raise, hold or cut, on what conditions, and roughly when. Because...
6
The Fed, the ECB and the Bank of England
The Federal Reserve, the European Central Bank and the Bank of England set policy for the three most traded currencies, and their meetings are the biggest...
7
The BoJ, RBA, RBNZ, BoC and SNB
The Bank of Japan, the Reserve Bank of Australia, the Reserve Bank of New Zealand, the Bank of Canada and the Swiss National Bank set policy for the yen, the...

8
CPI and Inflation Data
The consumer price index measures the change in the price of a basket of goods and services, and its monthly release is the most watched inflation figure in...
9
Employment and Nonfarm Payrolls
Employment data show how many people are working, how many are looking, and how fast wages are rising, and they are the second pillar of central bank decisions...
10
GDP, PMIs and Retail Sales
Gross domestic product measures the total output of an economy, published quarterly and revised for months afterwards. Purchasing managers' indices survey...
11
Consumer Confidence and Wage Growth
Consumer confidence surveys ask households how they feel about the economy and their own finances, and they anticipate spending; wage growth measures how fast...

12
Reading an Economic Calendar
An economic calendar lists scheduled releases with their time, the currency affected, an importance rating, the previous figure, the consensus forecast and,...
13
Interest Rates, Inflation and Currencies
Interest rates and inflation act on a currency through different channels and over different horizons. Higher real interest rates, the nominal rate minus...
14
Bonds, Gold and Oil
Currencies do not trade in isolation. Government bond yields are the market's live estimate of future interest rates, and a rising yield gap between two...

Every lesson's knowledge check plus a few extra questions, scored with feedback. Then continue to Course 8: Developing as a Trader.