The Research HUB: FX Primer, Pt 4

The primer for understanding and trading FX

Hey everyone,

This is Part 4 of the FX Primer!

5-Part FX Primer Breakdown:

• Part 1: FX - Resources, The Big Picture, Variables, Aggregating Knowledge, and Essential Tools.

• Part 2: FX - Synthesizing Information from Part 1: Theory, Practice, Causal Mechanics vs. Regression Analysis.

• Part 3: Delving into Historical Case Studies: The Importance of Studying History, Continuity vs. Discontinuity, and the Challenges of Backtesting in FX.

• Part 4: Examining the Current Environment.

• Part 5: Integrating Knowledge: Top-Down and Bottom-Up Analysis, Attribution Analysis, the Expectations vs. Actual Matrix, and Quantitative Models.

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Intro:

In this article, we will build on the foundation we set in the first three articles to examine the current regime in the US.

The main point I want to emphasize is that you need to be very careful using the US as the mental model for how FX works. This FX series is not meant to focus solely on the US dollar. While the US dollar is and will continue to be a significant currency, the United States occupies a unique position geographically, financially, and demographically.

What I would suggest is reviewing the Country Analysis article and connecting the concepts there with the ideas I am presenting in the FX Primer:

Alright, let’s get into the complexity!