In one lineFundamental analysis asks what economic information is changing expectations for a currency.
The number alone is not enough
Markets often react to the difference between the result and what participants expected.
Example
If inflation was expected at 3.0% but is released at 3.6%, traders may reassess the future path of interest rates.
The surprise can matter more than the headline alone.
Common fundamental drivers
- Inflation
- Employment
- Economic growth
- Interest-rate expectations
- Central-bank communication
- Risk sentiment
Remember this
- Compare actual data with expectations.
- Think in relative terms between economies.
- Fundamentals can affect both direction and volatility.
Educational content.
This lesson is provided for general educational and informational purposes and is not personal financial or investment advice.