Fundamental Analyzes? Relationship between Unemployment, Currency Rate and Inflation

In my last posts Fundamental Analyzes? FactorsInfluencing the Pricing On the Forex Market and Fundamental Analyzes? InflationIn Connection to Interest Rate and wage I have been writing about fundamental analyzes and some of the factors that affects the Forex market.

In this post I will illustrate how the unemployment rate affects the currency curve. The relationship is a macroeconomic relationship and is based on the last two posts and the articles Relationship Between Inflation & Unemployment Rate and the article NegativeRelationship Between Inflation & Unemployment 

In this post are overviews of the affects if the unemployment rate are low and high. The relationship between inflation and unemployment is also illustrated. Arguments why the relationship is as illustrated is in writing with videos in the last two posts and the mentioned articles.

If the unemployment is low 

If the unemployment is low the wages will rise. The prices and the inflation will also rise. Interest rates will fall and the currency will be weaker. 

If the unemployment is high 

If the unemployment is high the wages will fall. The prices and the inflation will also fall. Interest rates will rise and the currency will be stronger. 

The relationship between inflation and unemployment 

If inflation is high demand for goods will fall as wages is less worth. As demand for goods are less unemployment will start to rise.

If inflation is low demand for goods will rise as the wages value is worth more. As demand for goods are rising unemployment will start to fall.