Look… “Fundamentals” boil down to capital flow. Capital flow can be broken into yield seeking investors and cross border business transaction (such as mergers and acquisitions).
The trophy fundamental in the forex world is interest rates. All other economic releases are used to decipher what the interest rate policy will be of the country’s central bank (and in recent years stimulus policy). Higher interest rates attract the yield seeking investor and therefore the currency will appreciate with an interest rate increase.
Bad employment numbers out of Australia WILL negatively impact the Aussie dollar, not because its a negative number and it has any significance in an of itself, but because the central bank uses the numbers in its interest rate decision. Less jobs means monetary policy can loosen up which is bad for the home currency value. Speculators will use the jobs report as a leading indicator for the monetary policy.
Macro economic circumstances vary by country and from a month to month basis, depending on the circumstances inflation may be the central banks main concern and therefore PPI and CPI reports will be more significant. Sometimes jobs are more significant. Sometimes neither are significant because the market players are aware that the central bank is completely happy for the time period with its current monetary policy.
Take all other economic indicators and just try to think of it within the context of interest rates. If the central bank is showing willingness to change its monetary policies, the market will begin homing in on the key news releases, and the key is to interpret whether the data released would incline the central bank to change its policy.
If the central bank is firmly on hold, then market data means significantly less, and you’ll get whipsawed around. The data will still move the market, it’s just by a few pips instead of tens of pips, and the market will quickly find something else to drive it, giving the impression that the price is moving in an opposite direction as it should. In reality, the data was insignificant per the current market environment and something that was more relavent overruled its reaction.
Get into the habit of reading central bank rate statements at every release… They give you a glimpse into their decision process and highlights what their concerns are. If they mention inflation as a concern, then keep an eye on the next inflation report for that country… If they mention job growth, then pay attention to the next job release. If its a short statement that says something like “current monetary policy is deemed appropriate for the economy” then nothing but a surprise release way outside expectations will move the market definitively as interest rates won’t be moving anytime soon.
As for the Philly fed index… We are not really in a market situation where that type of data is under scrutiny… In August and September however, when the market was trying to decide if QE3 was on the table, this data was much more significant, because it was used as a leading indicator towards monetary policy decisions.
