The Complete Guide to Currency Trading & Investing: How to Earn High Rates of Return Safely and Take Control of Your Financial Investments REVISED 2ND EDITION by unknow

Author:unknow
Language: eng
Format: epub
Tags: currency, trading, investing, stock market, world, foreign currency, strategy
Publisher: Atlantic Publishing
Published: 2012-02-06T00:00:00+00:00

Industrial production (IP)

Industrial production (IP) data encompasses four major subcategories of production that are seasonally adjusted — manufacturing, mining, construction, and energy. The manufacturing component includes four main product groups — capital goods, basic and producer goods, consumer durables, and consumer non-durables. The market tends to focus on annual rates of change and monthly-adjusted IP estimates.

Although the market reacts to French IP figures, Germany’s IP is the most important for currency traders, because it is the largest country among the euro nations. Initial IP figures are released but are subject to revision, based on a subset of the data to be used in the final release. The final release is published when the full dataset becomes available. The initial release may also include indicators from the Finance Ministry of the expected direction of the revised data.

Unemployment

Unemployment data is released monthly in Germany, the largest economy in Europe, by the Federal Labor Office (FLO), along with changes from the previous month in both seasonally adjusted (SA) and non-seasonally adjusted (NSA) data. Non-seasonally adjusted unemployment data includes vacancies, the number of employed, and the number of short-shift working arrangements. Within hours of the FLO release, the Bundesbank release of seasonally adjusted unemployment data occurs.

Currency traders must interpret news reports carefully, so decisions are not made based on rumors and incorrect data. Weeks before the release of unemployment data, rumors spread about expected results. These rumors are usually based on imprecise data, and the international press sometimes misinterprets comments from German officials. On the day preceding the official releases of data, a trade union source typically leaks the official non-seasonally adjusted data in millions of dollars. When data is reported by Reuters, as provided by “sources for the NSA level of unemployment,” the data is official.

IFO survey

As the largest economy in Europe, Germany is responsible for more than 20 percent of the total European GDP. Any insight into German business and economic conditions is considered an insight into the whole of Europe. The IFO survey, conducted by the Institut für Wirtschaftsforschung an der Universität München, provides data compiled from more than 7,000 German businesses. The survey requests that these businesses provide an assessment of the German business climate and short-term plans. An initial publication of survey results includes the business climate headline figure and two equally weighted sub indexes — current business expectations and business conditions. A typical range of indices is 80 to 120, with the high value indicating greater business confidence. Measured values are most valuable when measured against previously compiled data.

Budget deficits

Individual European nations are governed by the Stability and Growth Pact, which dictates that deficits must be kept below 3 percent of the GDP. Individual countries set target rates to reduce deficits further. Market participants closely watch failure of these countries to meet their target rates because this can affect the value of the euro.

British economic indicators

The United Kingdom is the sixth largest economy in the world, with a GDP estimate in 2009 of $2.19 trillion U.S. dollars. The

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