KUIZ

QUESTION :

Identify the five (5) high impact fundamentals indicator in an industry foreign exchange (FOREX) and how are they impacted by e-commerce technology?

GBPUSD CURRENCIES

5) high impact fundamentals indicator

1)    Manufacturing Production m/m

-          It's a leading indicator of economic health - production reacts quickly to ups and downs in the business cycle and is correlated with consumer conditions such as employment levels and earnings;

2)    Asset Purchase Facility

-          It increases demand for bonds which tends to lower long-term interest rates;

3)    Official Bank Rate

-          Short term interest rates are the paramount factor in currency valuation - traders look at most other indicators merely to predict how rates will change in the future;

4)    MPC Rate Statement

-          It's among the primary tools the MPC uses to communicate with investors about monetary policy. It contains the outcome of their vote on interest rates and other policy measures, along with commentary about the economic conditions that influenced their votes. Most importantly, it discusses the economic outlook and offers clues on the outcome of future votes.

5)    Unemployment Claims

-          Although it's generally viewed as a lagging indicator, the number of unemployed people is an important signal of overall economic health because consumer spending is highly correlated with labor-market conditions.

How are they impacted by e-commerce technology?

Exchange rate risk

-           Exchange rate risk is the effect of the continuous shift in the worldwide

      market supply and demand balance on an outstanding foreign exchange    

      position. For the period it is outstanding, the position will be subject to all

      the price changes.

Interest rate risk

-          Interest rate risk refers to the profit and loss generated by fluctuations in the forward spreads, along with forward amount mismatches and maturity gaps among transactions in the foreign exchange book.

Investment Spending

-           Investment — or gross private domestic spending consists of fixed

                  investment and inventories.

The Gross National Product (GNP).

-          The Gross National Product measures the economic

                   performance of the whole economy. This indicator consists, at macro  

                   scale, of the sum of consumption spending, investment spending,  

                   government spending, and net trade.