Forex Trading Using Intermarket Analysis

gross domestic Product (gdP).
This is the broadest mea-
sure of a nation’s economic activity, providing the best over-
all indication of economic health. The U.S. GDP is released in 
three stages—preliminary, advanced, and revised. Any of these 
numbers can draw a reaction from traders in financial markets. 
Balance of Payments.
The monthly release of U.S. trade figures is 
a key day for forex traders. There are several aspects involved in the 
interaction between nations. The first involves the value of imports 
versus the value of exports in the monthly release of trade figures. The 
United States has been running a consistent trade deficit in recent 
years, and increases or decreases in that figure can move forex mar-
kets. Nations would naturally like to export more than they import, but 
the United States is in a crucial position as it is often regarded as the 
engine that drives world economies. Strong imports may be a sign of a 
booming U.S. economy and good news for those nations sending goods 
to the United States, but it may not be good for the value of the dollar.
The second important part of the interaction between nations involves 
current account flows, the amount of money flowing into a nation ver-
sus the amount of money flowing out. Large amounts of cash may flow 
into a country to buy stocks or Treasury instruments or other financial 
or physical purchases such as real estate. Cash has generally flowed 

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ForeX trading using interMarket anaLysis
into the United States and has been larger than the trade deficit, offset-
ting the negative aspects of that deficit on the dollar. 
employment reports. 
The report with perhaps the biggest single 
impact on financial markets is the monthly report of U.S. non-farm 
payrolls released on the first Friday of each month. A key num-
ber in the report is the number of new jobs created. Generally, 
the more new jobs, the more money consumers can be expected 
to spend, propelling more robust economic growth. However, a 
number that is too big can raise concerns about high inflation 
rates and have ramifications on interest rates that affect the forex 
market outlook. Traders also analyze components of the report, 
such as the average hourly workweek and average hourly earnings.