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The Forecast of a value of currency

The forecast of a value of currency

the Forecast of a value of currency

the exchange rate Forecast is made on the basis of calculation of a value of currency in relation to other currencies during time period. Though there are various theories which can be used for forecasting of rates of exchange, all of them have the restrictions. Any of theories did not manage to position monopoly for forecasting process. We see that there are, at least, two approaches to forecasting of change of the prices. The first is a fundamental analysis, the second - a commercial analysis.

The Fundamental approach: it is the forecast of rates of exchange after studying of factors which result in to a long-term cycle. Here the elementary data, falling into to the country, such as gross national product, inflation, indexes of productivity, a balance of trade and a rate of unemployment is taken into consideration. This approach is based on the precondition that "true value" currencies in the issue will is realised. Thus, this approach approaches for long-term investments.

The Technical approach: this approach is based on the precondition of mood of investors which defines change in currency exchange rate and does forecasts on graphic templates. Fund managers use these models for acceptance of competent decisions on temporary investments.

Market conditions are not the important factor for technical traders. Fundamentalists, as a rule, try to predict behaviour of the market, and then to predict, as the currency will react in such market conditions. For this purpose fundamental traders develop models from which build trading strategy. Technical traders pass directly to a trading system. Nevertheless, the commercial analysis is more useful to working out of trading strategy which predict the future price movements.

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