The focus of fundamental analysis lies on the economic, social and political forces that drive supply and demand.  There is no single set of beliefs that guide fundamental analysis, yet most fundamental analysts look at  various macroeconomic indicators such as economic growth rates, interest rates, inflation, and unemployment.

Several theories prevail as to how currencies should be valued.  Currency prices are a reflection of the balance between supply and demand for currencies.  Interest rates and the overall strength of the economy are the two primary factors that affect supply and demand.  Economic indicators (for example, GDP, foreign investment and the trade balance) reflect the overall health of an economy.  Therefore, they are responsible for the underlying changes in supply and demand for that currency. 

A tremendous amount of data is released at regular intervals, and some of this data is significant.  Data that is related to interest rates and international trade is analyzed very closely.

Economic indicator:

EMPLOYMENT

1	Unemployment Rate	Measure the monthly change in the job market	Unemployment Rate    ->  Income
		Obtained from surveying ± 60,000 households.	Spending         ->  Inflasi      ->
		Unemployment Rate normally lags 1-3 months	Interest Rate        ->    Dollar
		before economic slowdown
2	Non-Farm Payrolls	Measure the number of jobs created outside	NFP      -> Income      -> Spending
	(NFP)	the farming sector. Obtained from surveying 400,000	Inflasi       -> Interest      -> Dollar
		companies and government agencies.
		Need to focus on change in the survey conducted on
		the business community
3	Weekly Claims	Measure the number of unemployment benefits	Claims       -> Income     ->
		claimed each week.	Spending     -> Inflasi     ->
		Claims > 400rb for a few weeks signals economic	Interest Rate      -> Dollar
		slowdown
		Claims < 400K for a few weeks signals economic
		recovery

CONSUMER SPENDING AND CONFIDENCE

4	Retail Sales	Measure the level of consumer spending on goods.	RS     -> Inflasi     -> Interest
		Consumer spending makes up 70% of economic	Dollar
		activity. Obtained from surveying 13,000 retailers.	Overly strong retail sales is not good
			for USD in the long run, given US
			massive trade deficit
5	Consumer Confidence	Examine how consumers feel about changes in	Confidence     -> Inflasi      ->
		labour market, economy and spending	Interest      -> Dollar
		Consumer confidence index consists of Present
		Situation Index and Expectation Index
6	Univ. Of Michigan	Assesment of consumers' attitude on change in	Sentiment      -> Ekonomi      ->
	Consumer Sentiment	business climate, personal finance and shopping	Dollar
		There are 2 reports: Preliminary and Final
		Consist of Index of Current Economic Conditions and
		Index of Consumer Expectations

NATIONAL OUTPUT

7	GDP	Measures how fast/slow the economy is growing	GDP     -> inflasi     -> Interest
		GDP=Gross Domestic Product	Dollar
		GDP is the number of goods & services made in the US
		3 reports for GDP: Advance GDP(4 weeks after quarter	Real annual growth rate of 3-3.5% is
		ends), Preliminary GDP(1 month after Advance GDP)	considered the pace the economy has to
		and Final GDP(End of the quarter)	grow for people to get a feeling of
			prosperity
8	GDP Price Index	Measures level of inflation	Inflasi     -> interest     ->   Dollar
		Only taking into accounts goods and services
		produced by US, in other word exports only
9	Durable Goods Order	Measures number of orders for goods with life	Durable      -> ekonomi      ->  Dolar
		expectancy of 3 years or more, i.e: luxury goods
		It is a key indicator for future economic activity.	Whenever consumers grow uneasy
		Figure obtained from surveying 3500 manufacturers,	about the economy, first thing they do
		representing 89 industries	is to cut spending on durable goods
10	Industrial Production	Records industry's output and spare capacity	Production     -> Growth     -> Dollar
		Covers nearly everything that is produced in US
11	ISM Manufacturing	First monthly report on the economy with focus	ISM      -> ekon      -> Dollar
		on manufacturing sector
		ISM=Institute for Supply Management	ISM > 50 -> manufacturing growing
			ISM < 50 -> manufacturing contracting
			ISM = 50 -> no change in activity
12	ISM Non-Manufact	Monthly report focussing on service sector.	ISM      -> ekon      -> Dollar
		It is a new indicator thus not yet as important as the
		manufacturing report
13	Chicago PMI	Measures business activity in midwest region,	PMI     -> Dollar
		which is the industrial heartland of US

HOUSING AND CONSTRUCTION

14	Housing Starts	Records number of new houses being built	Housing     ->  profit      -> Inflasi     ->
		Residential estate is among the first sectors to	Interest      -> Dollar
		shut down when near economic recession and the first
		to bloom when economy start to turn up
15	Building Permits	Records number of new permits for future	Permit     -> Profit       ->Inflasi      ->
		construction	Interest      -> Dollar
16	Existing Home Sales	Measures monthly sales of previously owned	Sales      -> inflasi      ->
		homes	Interest      -> Dollar
17	New Home Sales	Measures number of sales of new homes	Little Impact or None

FOREIGN TRADE

18	International Trade	Monthly report on US exports and imports of	Deficit -> Dollar
	In Goods & Services	goods and services	Surplus -> Dollar
		Also known as Trade Balance/
		US trade performance is determined by 3 factors:
		1. Relative difference in growth rates between  US and
		other countries
		2. Changing value of USD against others
		3. Inflation rates differential

INFLATION

19	Consumer Price	Measures the average change in retail prices over time	CPI      -> Interest     ->  Dollar
	Index (CPI)	for a basket consisting of more than 200 categories	(Short Run)
		of assorted goods and services.
		Most popular measure of inflation in retail goods	(Long Run -> Dollar       )
		and services
20	Producer Price	Measures the change in prices paid by business	PPI     -> Interest     ->  Dollar
	Index (PPI)	during various stages of production.
		PPI does not take into account the price of service	(PPI rising too fast is bad for USD)