News and fundamentals
Fundamental Analysis for Currencies and Forex
Understand rates, inflation, growth and employment and how two economies interact inside one pair.
Answer first
What you should remember
- A currency pair compares two economies and two policy paths.
- Markets trade expectations and changes in them, not only current conditions.
- Real yields and risk flows can alter the impact of data.
Interest-rate differentials
Capital often favors the currency with higher expected risk-adjusted yield, but the pair follows the difference between two central-bank paths. A rate hike does not guarantee strength if priced in or paired with dovish guidance.
Inflation, growth and labor
Inflation shapes rates while growth and employment indicate how much policy the economy can absorb. A balanced view combines releases rather than turning each one into an automatic up or down arrow.
Risk appetite and safe havens
During stress, liquidity and haven flows can dominate local data. USD, JPY and CHF may behave differently depending on the shock and how positions are funded.
Building a comparison dashboard
Compare expected rates, inflation, growth and data-surprise momentum for each currency, then see whether price confirms the narrative. Reassess a fundamental view that price persistently rejects.
Direct answers
Frequently asked questions
Which is better: technical or fundamental?
Fundamentals explain drivers while technicals help timing and risk; a disciplined combination is often more complete.
Why can a currency fall after a rate hike?
The hike may be priced in, accompanied by weak guidance or outweighed by a more hawkish counterpart.