This lesson explains exchange rates and the theoretic economic principles of supply and demand and how they influence rates. We also take a look at the main actors in the Forex market.

4.1 Calculations of Exchange Rates   What is Being Exchanged?   Calculations of Exchange Rates   Currency Calculator and Live Rate Quotes 4.2 Supply and Demand   Demand, Supply, and Equilibrium   Changes to Demand and Supply

4.3 Actors that Affect Supply and Demand   Who Comprises the Forex Market?   Exporting and Importing Countries   Foreign Investment Flows   Banks   Speculators 4.4 Central Banks   Floating vs. Fixed Exchange Rates   Intervention   Interest Rates

This lesson explains the role of central banks in setting a country's interest rates. It discusses the effects that investment and inflation play in officials' decisions. We will also take one through an example of the Forex market's reaction to central banks' actions and expectations.

5.1 Introduction   Interest Rates Importance to Forex   Interest Rates Dictate Investment   Interest Rates Role in the Currency Markets 5.2 The Role of Central Banks   Central Banks Set Interest Rates   Role in Fighting Inflation   Inflation and Oil   Inflation, Interest Rates and Investment

5.3 Market Reactions to Central Banks – FOMC Example   Dollar Gaining   Trend Reverses 5.4 FOMC Example Continued   Euro Uptrend Continues   Fed Official Moves Markets with Hawkish Talk 5.5 Central Banks You Need to Know

This lesson explains what fundamental analysis is, and its importance to forex trading. We highlight and explain several macroeconomic, employment, and inflation indicators that help a trader to analyze the health of a country's economy.

6.1 What are Fundamental Factors? 6.2 Reaction of the Forex Market to a Fundamental Release   Non-Farm Employment Change Example   A Political Crisis Example   Safe Haven 6.3 Macroeconomic Indicators   GDP   Durable Goods   Retail Sales   Housing

6.4 Inflation & Inflation Indicators   Inflation’s Impact on an Economy   CPI   PPI   Average Hourly Earnings 6.5 Employment Indicators   Unemployment Rate   Non-farm Employment Change   Weekly Claims   Average Weekly Claims