One of the fundamental realities of economics is that things change in value over time. That change can be due to relatively objective factors, such as supply and demand, or to more elusive influences like consumer confidence. Financial analysts try to understand the reasons for changes in value and predict how they'll play out in the near future.
Within financial analysis, you'll find narrower specialties such as currency analysis, which focuses on the relative value of money over time. It's an especially complex field, because currencies can gain or lose strength not only in their own right, but in relation to each other.
FX Analyst Job Description
Currency analysts generally focus on the relationships between international currencies, so they're often referred to as foreign exchange analysts, usually shortened to "forex" or "FX" analysts. Currency analysis is a research-intensive profession. Analysts investigate a number of factors that can impact a currency's value. Many of these are simply the fundamentals of the underlying national economy, which therefore is described as fundamental analysis.
Analysts might also perform technical analysis, tracking the movement of currencies over time and sniffing out patterns that can be used to predict the movements of the market. Analysts might monitor these factors manually or construct software systems to do automated analysis. Drawing on this research, analysts then try to predict the rise and fall of currencies and how they might profitably be traded.
Communication is another key job function for analysts. Often, others are the traders or decision-makers, not the analysts themselves, and effectively communicating both recommendations and the underlying reasons for those recommendations is crucial.
Becoming a Currency Analyst
There are several paths to a career in currency analysis, but usually, all of them start with a bachelor's degree in a suitable discipline. These include obvious choices such as finance, economics or accounting, which address the financial side of the profession and also less-obvious majors such as mathematics, statistics or software design, which address the technical side.
After graduation, you'll need to work your connections or go through the standard application and interview process to find a job in the field with a suitable employer. You may also choose to pursue certification as a Chartered Financial Analyst, a credential overseen by the CFA Institute. To become a charterholder, you'll need to accumulate four years' work experience in the field and demonstrate your mastery of financial concepts by passing three notoriously difficult exams.
If you'll be involved in sales as well as analysis, laws in your state will usually require you to pass a licensing exam administered by the Financial Industry Regulatory Authority, or FINRA.
Currency Analyst Jobs
You'll have a number of potential career paths open to you as a currency analyst, depending on your ambitions, strengths and personality. Many large institutions, from governments to corporations to pension and investment funds, trade regularly in various currencies and employ analysts to inform their decision-making process.
Investment firms are another large employer of currency analysts, partly because foreign exchange is an investment opportunity in its own right, and partly because it affects the returns on overseas investments. At the most entrepreneurial end of the business, you might opt to be a trader yourself or to market your skills and insights as a consultant.
Currency Analyst Salary
The U.S. Bureau of Labor Statistics doesn't track the income of currency analysts separately, but instead includes them in the figures for all financial analysts. As of May 2018, the median annual income for all financial analysts was $85,660, with the top 10 percent earning $167,420 or more. As with any career, entry-level positions tend to pay less, but your potential earnings will grow as you acquire experience and specialized knowledge.
The BLS projects that demand for currency analysts will grow by 11 percent between 2016 and 2026. That's higher than the average for all occupations, but that doesn't mean you'll have your choice of positions. The Bureau's projections anticipate more applicants than positions, so you'll need to stack the odds in your favor wherever you can.
The BLS suggests that graduate degrees or advanced credentials and certifications can work in your favor, but don't underestimate the importance of networking and personal connections. Cultivating a mentor in the industry or reaching out to alumni from the same program or school you attended can be an important step at the beginning of any financial career.