It is a subject in schools. But its known as Economics. The subject that dwells in supply and demand, why the interest rate goes up or down and why do people trade. In the real world and in the world of commodities, Mother Nature comes into play.Weather can determine whether the harvest will be good or failed. Weather can also determined the movement of trade, for example; when there is stormy season, the price of fish will definitely go up.Why? Its too dangerous for fishing boats to go to sea.
Businesses that are public listed have to declare their balance sheet to the public through their Annual General Meeting. Also periodically, they have to publish the statements of accounts. These will help the investors to analyse their potential earnings. With the numbers of potential earnings, the company may cause their share price to increase. There are a number of analysts that have been employed by banks, insurance companies and investment houses whose sole job is to analyse data of potential investable companies. These people will look into the companies’ management, balance sheet and the industry growth. Its a lot of work and results will only show after weeks or even months. Real good returns usually come after a few years.
Governments, do not show the public their statements of accounts. So, how do we analyse currencies? Every country has a central banker, a finance minister, a trade minister or sometimes a satistics gathering body. These are the sources of information that will be used to analyse fundamentally. Every month, statistics like GDP (Gross Domestic Product), Inflation Rate, NFP (Non Farm Payroll); are released. These statistics may cause the currency market to fluctuate. Sometimes, an event like, the resigning of a finance minister, may cause the currency to drop. Especially when the minister is considered to be good, globally.