2 kinds of fundamental analysis factors:
1) Predictable: Interest Rate, Inflation, Unemployment, GDP. etc. The most important factor is the monetary policy- set measures which the government carry out in order to regulate the economic activities.

2) Unpredictable: Political Situation, military events, Terrorist attacks, Natural disasters.*Read on the effects of the 2011 Japan Tsunami on Japanese Yen*

The goal of each monetary policy is achieving certain economic effects. There are two groups of objectives and those are:

1) Development Goals: Specific measures to improve the economy of the country. This is an expansive monetary policy. This is found in economies that have a tendency to decline. This is achieved by:

- Decreasing the interest rate

- Increasing the volume ion Loans

- Reducing the rate of required bank reserves

2) Stabilization Goals: This is a restrictive monetary policy. The policy of expensive money and difficult credit situation. applies in situations where demand is bigger than supplies and there is a risk of inflation. The most common instruments are the :

- Increasing the interest rate

- Decreasing the volume of loans

- Increasing the rate of required bank reserves

*Follow closely the monetary policy of both currencies*

	Created by Geetika Singh over 5 years ago

FOREX TRADE ANALYSIS