relative economic strength forecasting approach

[jinstudy]

relative economic strength forecasting approach
vs
capital flows forecasting approach
I am always confused by them, what differences are they?

 

[Eazy E]

It’s what their name says.
Relative economic strength looks into economy as a whole -> your market goes up -> your currency value goes up because investors will bid up your currency to buy your stocks.
Capital flows looks into LONG TERM long term capital flows…for example if the central bank drops the interest rate, it doesnt mean investor will sell the currency because the CB only influences short term supply and demand.