Forex Trading Resources: Treasury International Capital

It is important to get a grasp for managing forex trading resources and forex news in order to have continued success with your forex broker. The best investors can predict market changes based on shifts in local economies and use every resource, no matter how minute, to gain an advantage and squeak out positive pips. One such resource is the Treasury International Capital report, which carefully studying can lead to tremendous gains.

Treasury International Capital

The Treasury International Capital (TIC) is a series of reports that reveal money flowing into and out from the United States. It is released by the US Department of the Treasury in the middle of every month with quarterly and annual updates as well.

Covering both long-term and short-term transactions for bonds, stocks, options, swaps, derivatives, currencies, bank transactions, forwards, and other cross-country deals, the Treasury International Capital is crucial to forex trading as it directly follows and calculates the exchanges that affect the market.

The Treasury International Capital is also known to as Net Foreign Purchases, because it calculates the total (net) amount of dealings made between countries. If one country drastically stops spending money, or participates in much more deals, then this could be signal of future decline or increase of that country’s currency for forex trading investors. Pay attention to significant changes in spending over long periods.

The TIC is calculated by the US Treasury, which takes the difference between the total value of foreign purchases of stock and bonds and the total of stocks and bonds sold by that country. As an equation:

TIC = (foreign purchases of stock and bonds) – (stocks and bonds sold)

A positive value equates to more securities being sold than bought, while negative a TIC value means that the country is currently spending more than it is selling.

Forex Trading Significance

Forex trading is based on currency strength, and TIC is an excellent representation of that figure. To buy stocks or bonds, you must first purchase that country’s currency. Thus, when a country’s securities are in greater demand, so too is its currency. Exchange rates have been known to shift dramatically along with the release of this monthly report. Strongly consider using this when investing with your forex trading platform.

By: Mr. Patrick Colt

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Patrick Kalashnikov is a freelance writer who is knowledgeable about FX trading,and how to get started with a forex broker. For more information about forex trading platforms, visit vertifx.com and check out forex trading tips.