Currency strength meter built on the fundamentals

A currency strength meter ranks currencies from strongest to weakest. Most meters read only price, so they show which currency has already moved. Ours ranks the ten major currencies by the Score, a fundamental read of currency strength built Factor by Factor.

Example boardSample data
CurrencyScoreBiasConfidence
AUD+9BullishHigh
NOK+5Slight BullishModerate
USD+2Slight BullishLow
EUR0NeutralModerate
JPY−4Slight BearishModerate
SEK−7BearishLow
An example currency strength meter, ranked by Score. Invented values, not today’s call; today’s board is in the membership.

Fundamental currency strength, currency by currency

The Score adds up how a currency stands on each Factor the desk scores, such as real interest rates, the central bank’s policy path and growth. Above zero leans strong, below zero leans weak.

On the board you see:

  • the ten currencies side by side, each with its Score;
  • the last 30 days of each Score, drawn small beside it;
  • a table of every Factor for every currency, which you can sort by any column;
  • the days a Score stepped, and what moved it.

Why fundamentals, not price

A price-based meter is quick, but it describes a move that has already happened. Fundamental strength changes more slowly: when the economy behind a currency changes.

That makes it a filter rather than a trigger. Pair a currency that scores high with one that scores low, and the fundamentals point the same way as the trade. The desk’s Call on each pair says whether it takes that trade itself.

How the desk works

Every Bias, Score and Call comes from the same routine.

  • It reads the sources: central banks, statistics offices and the CFTC’s positioning report.

  • It scores each of the ten currencies Factor by Factor; the Score adds them up.

  • It gives each currency a Bias with a Confidence, and each pair it trades a Call: Buy, Sell or Range.

  • It writes down why, and what would change the call.

  • It reads a call again when the data behind it changes: a release, a central-bank decision, a shift in positioning.

It is research, not a signal service: entry, size and exit stay yours.

Questions

Is this a live currency strength meter?

No. It does not move with every tick. A Score changes when the data behind it does: a release, a central-bank decision, a shift in positioning.

Is it another price-based strength meter?

No. Price meters rank recent moves. The Score ranks the economies behind the currencies, so it says why a currency should be strong or weak, not only that it was.

Which currencies does it cover?

The ten majors: USD, EUR, JPY, GBP, CHF, AUD, NZD, CAD, SEK and NOK.

Forex Fundamentals is research, not investment advice: entry, size and exit stay yours. Trading foreign exchange carries risk.