A Complete Forex Trading Library: A four book box set for trading forex, with all you need to know from fundamental to technical and relational, and supported by the volume price analysis methodology by Coulling Anna

A Complete Forex Trading Library: A four book box set for trading forex, with all you need to know from fundamental to technical and relational, and supported by the volume price analysis methodology by Coulling Anna

Author:Coulling, Anna [Coulling, Anna]
Language: eng
Format: epub
Publisher: Marinablu International Ltd
Published: 2018-11-27T16:00:00+00:00


The second German indicator to consider is the ZEW economic sentiment indicator which delivers another key number for the euro.

The ZEW provides further data on the German economy and is released monthly. This economic indicator is another from the diffusion index stable, and is based on a survey of both institutional investors and analysts. The survey covers all areas of the economy including exchange rates, stock markets and inflation.

Like the IFO, this is a highly respected indicator, as the index is prepared and released by the centre for European Economic Research and is based on a large sample of over three hundred and fifty respondents. The respondents are asked to rate the economy and their outlook for the next six months.

It is considered to be a leading indicator for the Germany economy, the most important in Europe. The survey data is converted into a diffusion index which, in this case, has a tipping point of zero, with above the line representing optimism and below the line representing pessimism.

The index is reported as a single headline number which is either positive or negative and which can be anywhere between minus fifty or sixty to plus seventy to eighty depending on the economic outlook of the analysts.

The investors and analysts may of course be wrong in their view, but they are given credence by virtue of their experience and knowledge of the markets. Therefore, the sentiment for the economy expressed in this index carries a lot of weight in the market.

In general, if the number is better than expected and in a rising trend above the zero line the euro is likely to strengthen, and if the number is weak and falling or even below the zero line the euro is likely to weaken. However, as always with the euro, traders are at the mercy of the ECB and its political masters.

Moving back to the US and to a curious economic indicator known as the TIC long term purchases. The relationship this economic indicator has with the US dollar is not straightforward. At times, it can spark a strong reaction in the dollar, while at other times the release passes by unnoticed by the markets as they wait for the next item of news. Despite this behaviour it is still considered a tier one or red flag item of news on the economic calendar.

TIC stands for Treasury International Capital and this indicator measures whether there has been a net outflow of US dollars, or net inflow into the country. As result, it should logically affect the strength or weakness of the US dollar. Moreover, the indicator is also making a statement about overseas confidence in the US dollar as well as giving information about longer term investment returns.

Here is an example of the data which is incorporated into the TIC. When a non US citizen wants to buy US shares or bonds, the home currency has to be converted and US dollars bought. Conversely, when a US citizen wants to buy foreign securities US dollars have to be sold and converted.



Download



Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.