If you think it's difficult to value one company, try valuing a whole country! Fundamental analysis in the forex market is often very complex, and it's usually used only to predict long-term trends; however, some traders do trade short term strictly on news releases. There are many different fundamental indicators of currency values released at many different times.
Here are a few:
-Purchasing Managers Index (PMI)
-Consumer Price Index (CPI)
These reports are not the only fundamental factors to watch. There are also several meetings that provide quotes and commentary, which can affect markets just as much as any report. These meetings are often called to discuss interest rates, inflation and other issues that affect currency valuations. Even changes in wording when addressing certain issues - the Federal Reserve chairman's comments on interest rates, for example - can cause market volatility.
Simply reading the reports and examining the commentary can help forex fundamental analysts gain a better understanding of long-term market trends and allow short-term traders to profit from extraordinary happenings. If you choose to follow a fundamental strategy, be sure to keep a calendar that highlights important dates so you know when these reports are released. Your broker may also provide real-time access to such information.
Now that you've gotten your feet wet, let's dig in a little deeper into the basics of forex.