The Role of Economic News and Data in Forex Trading

economic news

The Role of Economic News and Data in Forex Trading

As we all know, the economic news is crucial in the trading business and this has been proven again in forex market history. For instance, if the FOMC issued a report showing growth in unemployment, which is not expected for a few months at least, this will have a significant impact on the market as the currency will weaken against other currencies. Consequently, a trader will be making profit on currencies that have strengthened against others, hence the need to keep a track of economic news.

Economic news tab on Forex Factory This is especially true in case there is any sort of economic news or any major economic news conference like the FOMC report mentioned above. The economic news calendar looks like this: There are 7 columns in the economic news calendar. Each of the 7 topics can be viewed by clicking on the topic. For example, one can see the latest on retail sales. The economic news on retail sales reports on overall retail sales. The Retail segment can be easily viewed by clicking on retail sales.

The economic news on these issues that are related to the currency market are usually released by the central banks. However, it is best to subscribe to the news feeds of various websites as this will help you stay current with the currency market. Economic news and short-term movements in the currency market can be found in this type of news releases, which will also provide you with information about the short-term movements in a particular market.

Economic news released by the central banks can either be long-term or short-term movements in the forex market. Short-term forex news can include reports from the central banks, financial institutions, trade unions and other bodies that can influence currency prices. Long-term forex news usually concerns policy and structural changes in the foreign monetary system.

A good example of economic news released by the central bank would be the release of wholesale and retail sales figures for a given quarter. These reports are important to currency traders as they provide an estimate of the changes that take place both in the short-term and long-term perspectives. Economic news from the Fed often discusses rate increases, inflation, unemployment, GDP growth and other indicators of domestic spending and economic activity. Long-term economic news, such as national interest rates and retail sales figures, would be more informative to traders.

The types of economic news that can be used by forex traders are widely varying. Some news releases can be downloaded immediately. Others have to be evaluated on the strength of the data. For instance, the Federal Reserve Bank of America releases data releases on some economic indicators. While the data may sound supportive of an uptrend in the dollar, there are still important factors that need to be considered before jumping into a trade. Currency prices should always be examined with several supporting indicators to weigh the impact of any change.

Economic news and data releases are not only making available to currency traders. Many newspapers also publish economic news that can affect the value of various currency pairs. The release of non-seasonally scheduled economic events, such as Consumer Price Index (CPI) figures, can significantly impact the performance of currency pairs.

Another reason why economic news and data releases are important is because they influence future interest rate decisions by the central bank of the United States. Changes in the status of the U.S. federal funds rate can have significant implications on currency rates and related economic developments. When the FOMC makes a change in its official stance on interest rates, it can have a significant impact on the relative strength or weakness of the U.S. Dollar. Similarly, changes in European policy interest rates can have similar effects on the strength of the euro and other currencies. Understanding the sources of economic news and data releases can help traders evaluate their exposure to risk.

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