Fundamental and Macroeconomic Analysis

Fundamental Analysis is the assessment of a business or a whole economy based on data pertaining to that business or economy. For an individual company this would include an analysis of the balance sheet, liabilities, assets, revenues, earnings, profits etc.

For a country’s economy, fundamental (or macroeconomic) analysis would look at and analyse many factors including; GDP, Employment, Inflation, interest rates, production as well as many other data points.

Traders can then use their analysis to derive a valuation about the true fundamental value for a security, asset, commodity or FX rate. The fundamental (or macroeconomic) analyst or trader can then compare this valuation with the current price (of the security, asset, commodity or FX rate) and then make a decision of whether it is overvalued or undervalued, then decide whether to sell or buy.

In this section we will look at fundamental and macroeconomic analysis in more detail. Furthermore, we will deliver articles aimed at developing the readers’ understanding and use of this approach. Read more of our forex education articles here.


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Hawk / Dove Sheet

Here we present the Hawk / Dove sheet, an explanation of the terminology as well as the implications on forex trading and how it is used in fundamental analysis. Hawkish and Dovish Hawkish A Hawk is a term originally used in economics to describe economists or Central Bankers who are more concerned with potential recession … Continued

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Sovereign Rating Sheet

A credit rating is the assessment of the credit risk of a potential borrower or debtor. Primarily this focuses on the capacity to make repayment of the debt, and therefore implicitly a prediction of the probability or possibility of the debtor not repaying (or defaulting). Sovereign Debt Ratings are a form of credit rating, but … Continued