Forex Metrics Currency Index is a economic analysis tool which represents a Single Global Currency Unit which explains the Global Economic Cycle.

Forex Metrics Currency Index is derived by determining intrinsic value of 10 major convertible currencies. The Index represents the intensity and volatility of Global Economic cycle where higher value of Single Global Currency Unit represents Productive Economic Cycle.

Convertible Currency of a country is always traded in pairs and hence we have only relative value of currency against the other. Forex Metrics Currency Index calculates intrinsic value of each currency against ten paired convertible currencies to derive a Single Global Currency unit.

This Forex Metrics Currency Index represents net global economic cycle based on the free market value of each convertible currencies.

Forex Metrics currency Index is an economic indicator representing Single Global Currency Unit which also explains Global Economic Trend.

Forex Metrics Currency Index is pure economic indicator and can be use for various purposes including forex trading and determining economic cycle of organized economy.

Forex Metrics Currency Index is a valuable tool in Financial Industry, but to optimize its use Index works best when used in conjunction with other Fundamental and Technical Analysis.

How can Forex Metrics Currency Index be useful to forex trader?

Forex trader and Forex Metrics Currency Index

Forex trader uses Fundamental Analysis or Technical Analysis or both. In order to determine trend of a currency pair, following technique should be taken into consideration.

• Trader can compare the value of both paired currency with Forex Metrics Currency Index. Currency which is relatively stronger is "Buy" and vice versa.
  
  
• Forex Metrics Currency Index has various ranges representing economic cycle. For example, stagflation represents range bound trading., where as Growth cycle represents "Buy".
  
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FMCI is a unit value derived from ten major globally convertible currencies.
These currencies are :

USD | EUR | GBP | JPY | CHF | CAD | AUD | NZD | HKD | SGD

Valuation of currency
Valuation is done by pairing each currency with the other nine individual currencies in order to derive the value of that currency against the other nine individual currencies.

Average of values
The FMCI is the average of all 10 values of these ten currencies paired against each other.

Forex Metrics Currency Index determines the value of Global Currency.
I in other words would be, if globally, there was a currency, that would be it's value.

All the currencies are traded in pairs and therefore, relative.

Currently, currency value signifies the current economic cycle and phase of that particular country and that reflects only the relative value.

The purpose of FMCI is to explain the current global economic Cycle. This tool is useful for economists, institutions, forex market, equity market, securities market, financial industries, traders and respective government authorities to understand their current economic situation compared to the overall global economy.

• “Forex Metrics Currency Index” is a barometer to measure overall relative global economic Cycle based on value of major global convertible currencies.
  
  
• FMCI does not only represents a single global currency, but also determines global economic cycle.
  
  
• FMCI forecast currency trend through individual currency basket
  
  
• Forex Metrics Currency Index fundamentally identifies the long term signals for major currency pair.

Refer to Following Table for detail:
Check out Current “Forex Metrics Currency Index”

Interpretation of Continuous Moving Average Of Forex Metrics Currency Index

How To Read Continuous Moving Average

Forex Metrics Currency Index consists of averages of 10 baskets of currency representing Value of a single global currency, which tracks movement of individual currency as well as basket of each individual currency.

Forex Metrics Currency Index is different from fundamental and technical analysis specifically designed to understand and explain currency movement. It is a metrics of all global convertible currencies.

Forex Metrics Currency Index is an effective tool which tracks and explains the currency and currency pair movements in terms of Global Economic Cycle Inflation, Growth, Purchasing Power Parity and Price Stability.

Forex Metrics Currency Index is a valuable tool for economist, traders, financial institutions and any individual or business involved in international trade or global businesses.

Forex Metrics Currency Index has also averages since interception in October, 2007. It is Known as "CONTINUOUS MOVING AVERAGE" (CMA)

This Continuous Moving Average is not only of Index, but has CMA of each individual Currencies. CMA is specially developed to understand fundaments of currency from economic cycle and technical analysis point of view.

CMA and FMCI chart explains the specifics of currency movements.

If CMA is greater than FMCI : example CMA = 1.2200 > FMCI = 1.2100

• It is to be considered as a bearish signal, that represents slow global economic growth / recession / stagflation depending upon the Index reading and the differences.
  
  
• If difference between CMA and FMCI is low, this will represent inherit strength in global economic growth and increasing inflation, but global economy overall would be experiencing stagflation.
  example CMA = 1.2200 > FMCI = 1.2250
  
  
• Low index reading of CMA & FMCI signifies that global economies are in recession.
  example CMA = 1.0110 > FMCI = 1.0090
  
  
• If CMA and FMCI Index readings are low and the difference between CMA and FMCI is high, this explains a sudden drop and severe slow down in global economic growth.
  example CMA = 1.1400 > FMCI = 1.1100
  
  
• If CMA > FMCI and readings of FMCI and CMA are high, this represents gradual economic slowdown and high inflation.
  example CMA = 1.2600 > FMCI = 1.2500
  
  
• If CMA > FMCI and readings of FMCI and CMA are high and the difference between CMA and FMCI is also high, then it represents reducing economic growth and increasing inflation rate at high pace.
  example CMA = 1.2900 > FMCI = 1.2500

If Continuous Moving Average is Less than Forex Metrics Currency Index :

It is to be considered as a bullish signal that represents economic growth / inflation / stagflation depending upon the numbers and the differences.

• If difference between CMA and FMCI is very low, it represents inherit strength in global growth and increasing inflation, but global economy overall would be experiencing stagflation.
  example CMA = 1.2250 < FMCI = 1.2300
  
• Low index reading of CMA and FMCI signifies that global economies are experiencing slow growth with low inflation.
  example CMA = 1.1300 < FMCI = 1.1400
  
  
• If CMA and FMCI Index readings are low and the difference between CMA and FMCI is high, this explains a sudden exponential rise in inflation and exponential increase in global economic growth.
  example CMA = 1.1100 < FMCI = 1.1400
  
  
• If CMA < FMCI and readings of FMCI and CMA are high, then it represents increasing economic growth and rising inflation.
  example CMA = 1.2500 < FMCI = 1.2600
  
  
• If CMA < FMCI and readings of FMCI and CMA are high and the difference between CMA and FMCI is also high, then it represents exponential growth and exponential increase in inflation rate, close to hyper inflation.
  example CMA = 1.2500 < FMCI = 1.2900
  
  
• If CMA < FMCI and the difference is above 3%, then it represents high growth rate , but inflation is higher than growth rate which may possibly lead to negative GDP.

Notes:

Higher reading signifies global economic growth and Inflation will be determined by comparative readings.
Lower reading signifies global economic slowdown and inflationary pressure will be determined by comparative readings.

Continuous Moving Average and Forex Metrics Currency Index is published daily with reports and interpretations. click here for Forex Metrics Currency Index daily update.

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