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Talking Fudamentals

Talking Fudamentals

Let’s try to make an exercise and imagine you are a central banker and your task is to fight this deflationary situation the world is facing. You think it’s an easy task? Definitely not as each and every central bank in the world has a mandate. And some, like it is the Federal Reserve’s case in the United States, has a dual mandate.

Forex broker reviews are important for all traders, retailers or not, beginners or not, professionals or not. And I am talking about the reviews that analyze markets from a fundamental point of view, because in order to trade the foreign exchange markets you don’t wave to own an economics degree, but if you don’t, then why not listen to what experts have to say about fundamental things that move the markets, about how to interpret what central bankers do, etc.

And this is bringing us back to the mandates major central banks in the world have, with the majority of the central banks have the mandate to keep inflation below or close to two percent, now with Bank of Japan joining, only the Federal Reserve in the United States having a dual mandate: to keep inflation below or close to two percent and to create jobs. This dual mandate make things extremely complicated as some measures taken to fight inflation, for example, might hurt job creation, with the opposite being true as well.

Right interpretation of economic releases is one thing, and how the market really reacts to it is a totally different thing. It should be put into balance what is important for the markets and try to analyze that. At this very moment of time, the thing that seems to the move markets is the jobs data in the United States and this is valid from the moment the Federal Reserve tied the unemployment rate to the quantitative easing program it is running.

In conclusion, don’t think that being a central banker analyzing fundamentals is easy and try to listen to those forex brokers reviews that talk fundamentals and you’re going to be surprised by the multitude of opinions people might have looking at the same thing.

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