What do you think of my Eur/Usd fundamentals?

Ok i am still learning fundamentals. So maybe you can help me if you have more knowledge than i have.

1. There is a inverse relationship between die USD and Gold.
When the USD is strenghtens, then the price of Gold declines. An extended fall in the price of gold shows that investors have chosen to exit gold in favor of the dollar.

2. There is an inverse relationship between USD and Oil
When the USD declines then the price of Oil rises. Higher oil prices leads to higher trade deficits that leads to a weaker dollar that leads to higher oil prices.

3. Equity markets
The stronger the US equity markets, the better the USD will perform cause citizens have confidence in the equity markets therefor they invest more in those markets. The higher the Dow Jones the stronger the USD.

4. Interest Rates

Falling interest rates pull the dollar lower. A falling dollar, being inflationary, eventually pushes interest rates higher. Rising interest rates pull the dollar higher. The rising dollar, being non-inflationary, eventually pushes interest rates lower.

1. Gross Domestic Product (GDP)
The GDP measurs the current state of the US economy. Strong GDP figures would strengthen the USD whereas weak GDP figures would weaken the USD. The us economy is expected to rise between 2.5 -3% per year.

2. Consumer Price Index (CPI)
CPI is a good measure for inflation. CPI works on the same concept as GDP

3. The Producer Price Index (PPI)
The PPI is also a goods measure for inflation. PPI works on the same concept as GDP

4. Employment Indicators
The unemployment rate is a strong indicator of a country’s economic strength. When unemployment is high, the economy may be weak – and hence its currency may fall in value.

5. Retail Sales Index
The higher the retail sales number the stronger the USD will be.

6. Consumer Confidence Index
The higher the figures the stronger the USD will trade.


7. Lower rates of inflation The lower inflation the more buying power the USD has. More buying power means a stonger USD.

8. A domestic trade surplus relative to other countries
Trade surplus is the difference between import and exports. Better to have more exports than imports. The more exports the USA have the stronger the USD.

9. Political or military unrest in other countries
No investor is gonna invest in a country if there is political unrest.


So looking at all this info i can see why the USD is trading weaker.

Let me know if i am missing something???

Generally you are missing the other side of your equations. Interest rates, for example, should be measured as a differential with those of other nations and then corrected for inflation on both sides.
FX is all about the financial relationships between parties, not one party on it's own.

please eloborate more on the other side of the equation. In this case the euro.

i disagree with equity vs dolar somewhat, last 2006 may, dolar was gainng, gold was loosing, and stocks went down as well (majority) trou out the globe... and is not neceseary that if the interest rest do lower, the dolar would be loosing ground, it might have the anti effect on longer time frames i think,...p.s. thats a wild double guess....

i have to agree with you on that one...currently the equity markets are doing well...and dow jones are breaking records every week...yet the dollar is under pressure