One of the keys to understanding global economics can perhaps be found within the core economic indicators that drive market sentiment. Often, these indicators are not exclusive to the US economy. Many economic indicators are used by multiple countries, while others are specific only to certain economies. You should consider a looking at the following fundamental indicators that drive the following countries and their currencies:
| Code | Definition |
|---|---|
| GBP | Great Britain Pound |
| JPY | Japanese Yen |
| EUR | European Dollar |
| CHF | Swiss Franc |
| NZD | New Zealand Dollar |
| AUD | Australian Dollar |
| CAD | Canadian Dollar |
Every currency that you trade is paired with another currency for the purpose of establishing a comparative value. Consider it a battle of economies if you like, If trading the GBP/USD you had better know about not only the economic indicators that move the Dollar, but also of the key indicators that move the Pound. The dollar might be gathering strength across the board, but what could happen if the UK released a Trade Balance report showing an increase in exports. As most economists know, increased exports tend to precede an increased demand for a nation's currency. The point is to have an eye on both of the economies, or currencies, that you are dealing in.
You may notice in many books and websites, a heavy emphasis is placed on the US economy. This is not an issue of pride, but rather is the case because of the position of the US economy globally. Also, the US Dollar is either the Base or the Cross currency in 7 major pairs:
Traders need to be aware of major economic indicators around the entire globe. Each currency has a very unique place in the global market, and moreover, each currency is impacted by various economic indicators.