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Important Forex News
As a trader you need to be knowledgeable and up to date. As a result, any important forex news need to be seen to as they can have a considerable impact on your trading decisions. News trading is of the essence as it can highlight opportunities for profits which may have otherwise go unnoticed. Having said that not all macroeconomic news will have the same impact on the forex market, and so you need to be careful about placing more importance on what can really matter.
A lot of forex news are shown on economic calendars. You can also often determine the extent to which such news are leaving an impact on the market. Low impact news can still have an impact on certain currency pairs.
The following are some forex news which you may wish to keep an eye on:
Unemployment rate
The unemployment rate is matter of great importance for central banks in any country. The goal is to manage to maintain a low unemployment rate and monetary policy decisions will be made with this goal. As a result this will impact the currency valuation. All economies release statistics relating to the rate of unemployment monthly, and the lower this goes, the better the currency value will get. This will also affect the interest rate and the inflation as the expectation is that when these are high there will be a lower unemployment rate. Consequently one can safely say that the unemployment rate is a very important indicator for upcoming monetary policies.
Gross Domestic Product
The GDP is of utmost importance. It measures the overall health of the economy. The higher the GDP growth rate is, the expectations are that the stronger the currency is. Hence it is important to keep an eye on the GDP growth rate of the countries whose currencies you are trading.
Consumer Price Index
The CPI is a measure of the rate of inflation in the economy. This is compared to a base year. Central banks often try to set monetary policies to limit the inflation rate to a predefined range, and when inflation exceeds this level the response is to increase the interest rate in an attempt to lower the inflation.
Overnight Interest Rate
Central banks attempt to influence the overnight rate as when the lend they establish an overnight interest rate. This is in fact one of the main reasons for price fluctuations and it also has an effect on the swap rate.
OPEC news
OPEC countries control almost half of the world's crude oil output. Consequently their decisions have a considerable impact on the global energy market. This influence often results in movements in the currency market. For instance, typically when OPEC increases production, this often leads to a rise in US GDP growth (due to their significant oil reserves). This can lead to bullish news for the USD in relation to other currencies.
Retail Sales
Such reports are generally issued on a monthly basis and they can be helpful macroeconomic indicators. If consumers feel safe, they naturally feel more inclined to spend more. The boost in transactions can lead to a higher GDP growth rate. Such analysis should however ideally be carried out by taking into account other factors such as the wage growth and productivity levels.
PMI
The Purchasing Managers Index is based on survey results of purchasing managers of importance in an economy. This will include their perspective on workforce size, inventory levels and other related key factors.
Housing data
The housing sector has a considerable impact on the economy and certain important statistics in this regard may be of importance for forex trading.
A lot of forex news are shown on economic calendars. You can also often determine the extent to which such news are leaving an impact on the market. Low impact news can still have an impact on certain currency pairs.
The following are some forex news which you may wish to keep an eye on:
Unemployment rate
The unemployment rate is matter of great importance for central banks in any country. The goal is to manage to maintain a low unemployment rate and monetary policy decisions will be made with this goal. As a result this will impact the currency valuation. All economies release statistics relating to the rate of unemployment monthly, and the lower this goes, the better the currency value will get. This will also affect the interest rate and the inflation as the expectation is that when these are high there will be a lower unemployment rate. Consequently one can safely say that the unemployment rate is a very important indicator for upcoming monetary policies.
Gross Domestic Product
The GDP is of utmost importance. It measures the overall health of the economy. The higher the GDP growth rate is, the expectations are that the stronger the currency is. Hence it is important to keep an eye on the GDP growth rate of the countries whose currencies you are trading.
Consumer Price Index
The CPI is a measure of the rate of inflation in the economy. This is compared to a base year. Central banks often try to set monetary policies to limit the inflation rate to a predefined range, and when inflation exceeds this level the response is to increase the interest rate in an attempt to lower the inflation.
Overnight Interest Rate
Central banks attempt to influence the overnight rate as when the lend they establish an overnight interest rate. This is in fact one of the main reasons for price fluctuations and it also has an effect on the swap rate.
OPEC news
OPEC countries control almost half of the world's crude oil output. Consequently their decisions have a considerable impact on the global energy market. This influence often results in movements in the currency market. For instance, typically when OPEC increases production, this often leads to a rise in US GDP growth (due to their significant oil reserves). This can lead to bullish news for the USD in relation to other currencies.
Retail Sales
Such reports are generally issued on a monthly basis and they can be helpful macroeconomic indicators. If consumers feel safe, they naturally feel more inclined to spend more. The boost in transactions can lead to a higher GDP growth rate. Such analysis should however ideally be carried out by taking into account other factors such as the wage growth and productivity levels.
PMI
The Purchasing Managers Index is based on survey results of purchasing managers of importance in an economy. This will include their perspective on workforce size, inventory levels and other related key factors.
Housing data
The housing sector has a considerable impact on the economy and certain important statistics in this regard may be of importance for forex trading.