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This is the first of a two-case series (299-048-1 and 299-049-1). It is essential in appreciating the reaction of currency markets to economic news to be able to break down the components of nominal GNP. The key indicators affecting Nominal GNP, defined below, are the GNP deflator, producer price index, industrial production, capacity utilisation, consumer price index, average earnings, employment cost index, leading indicators and vendor deliveries index. An understanding of the way the economy is evolving is best seen by applying what economists refer to as the standard macro-economic model. This breaks the economy down into those factors affecting, in turn, consumer spending, investment, government spending and taxation and the effect of the balance of payments. These together add up to what is referred to as Gross National Product. This two part case is designed to illustrate which economic indicators are most likely to move the foreign exchange market. Part one illustrates the role of the factors affecting Nominal GNP. Part two illustrates those economic indicators which most affect consumption expenditure, investment, government expenditure and foreign trade, and which in turn influence the currency markets. This case is suitable for undergraduate and postgraduate courses with an international finance, international banking or international business component. The themes covered also provide an analytical framework in which multi-national company decision making has to be analysed whether from the point of view of international finance, international marketing or international corporate strategy. It is particularly suitable for business situations where foreign exchange hedging and arbitrage decisions are being discussed.