Export Prices Index is one of the figures applied in fundamental analysis of the market. It renders change of exported goods for a month, and as import prices, act as indicator of inflation.
Formation of Export Prices Index
Upon exportation of goods, an exporter pays state a certain amount to support economic stability of the state. However, a number of export tariffs can be decreased or removed. Purpose of such a removal is supporting competitive ability of exported goods on global market through declining its cost. Thus, decline of export prices can signalize about low stability of the state economy and its currency, because an additional incentive to boost demand for goods is required to increase growth of capital.
Grown export prices demonstrate a high level of demand for goods on global market, notwithstanding a higher cost and consolidation of currency in the result. Upon that, a goal may be to promote sales in internal market that also can tell about high level of economy and consolidated currency.
Export Prices index in fundamental analysis
Export Prices index is not a significant figure for the market. It shows change of export price for a month and is usually applied in long-term analysis. Consolidation of currency rate is associated with growth of export price, therefore, this figure can be used to confirm rate growth in the situation of growth of interest rates.
For instance, upon growth of interest rates and export prices, we can expect that rate of base currency will go up. The reason of upsurge is that with a strong national currency export prices can grow. Also Export Prices Index is considered along with Production Price Index, Consumer Price Index and money aggregates М1, М2, М3 etc. The relation between income and expenses of the state impacts on currency rate and under conditions of trade deficit and dropdown of export prices, the rate falls.
Export Prices index is published once a month on 10th at 8:30 a.m, New York, together with Import Prices Index. Largely fundamental analysis applies US data reported by The Census Bureau of the Department of Commerce. Export prices index is expressed as a relative value. In economic news you can see this data as growth or decline percentage towards the previous period, for example, 0,3% or -0,5%.