ARTICLE ONE: FUNDAMENTAL ANALYSIS- GROSS DOMESTIC PRODUCT (GDP) and GROSS NATIONAL PRODUCT (GNP)

Many use fundamental or technical analysis to trade , and this- fundamental and technical analysis- have indicators that show when to enter a trade or when not to enter a trade. Fundamental or technical indicators could either be lagging, leading or coincident indicators. Lagging indicators show data after the market moves, leading indicators show data before the  market moves and coincident indicators move with the  market.

This and proceeding writings will discuss fundamental and technical analysis indicators. But this writing will be about Gross Domestic Product (GDP) and Gross National Product (GNP) as fundamental analysis currency indicators.
Gross Domestic Product (GDP) is a fundamental indicator of economic performance of any country. GDP measures all economic activities which is the total value of goods and services produced during a period of time.

HOW IS GDP CALCULATED? Many economists calculate a country’s GDP by adding up the value of goods and services produced or by adding up expenditure on goods and services at the time of sale or by adding producer’s incomes from the sale of goods or services.
How does GDP affect forex? A high GDP indicates a healthy economy; a high GDP indicates high interest and exchange rate of a currency.
More on this later.

GROSS NATIONAL PRODUCT (GNP)
Gross National Product (GNP) is similar to Gross Domestic Product (GDP). GNP is used to describe in monetary value the total yearly flow of goods and services in country’s economy. Basically, GNP shows how a nations economy is on a micro and macro scale. GNP is calculated by adding up all personal, governmental and investment spending by a country’s industry both nationally and internationally.
GNP is a good trading indicator, if the GNP of a country is low; it indicates a weak economy and a low exchange and interest rate of the country’s currency. Which wouldn’t be a currency to go short to go long on another currency with a higher GNP, a higher exchange and interest rate, a stronger currency.
More on this later.
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