Forex market movement is influenced by many factors. Currency value movement is greatly affected by interest rate. If the interest rate of the country is high, then the currency value also increases. Different economic events and central banks guide those interest rates. This means that economic news can have a dramatic effect on your Forex trading and all traders should be on top of all world news.
Certain economic news is valuable because they show us how central banks can change interest rates in the future. This concerns everything that affects country’s GDP and CPI in the short or long term. Other economic news changes Forex positions right away.
Country’s GDP as well as economic outlook is greatly affected by consumer spending. The main consumer spending indicators in the United States are the surveys held by the University of Michigan and the Conference Board. The consumer confidence sentiment is also published by the European Commission monthly. As for the United Kingdom, consumer confidence reports are issued by the Nationwide Building Society and GFK Group. An estimate of consumer sentiment is published by the Cabinet Office of Japan.
Sentiment is surely only a guide. The retail sales report of the country is more important to keep track of. Governments of many countries like the U.S., Japan, Canada, Australia, Switzerland and others issue retail sales reports. The same reports are issued by Eurostat for the European Union.
Traders should check monthly manufacturing and nonmanufacturing indexes issued by the U.S. Institute of Supply Management as well as durable goods orders reports released by Commerce Department. There is also retail purchasing index report in Europe you can check. As for the Canada, you can check the Ivey Purchasing Index as well as many other indexes in various countries, depending on the currency you are interested in.
Forex traders should know to keep an eye on trade data, because this data balance can dramatically influence relative currency values. Interest rate and central economic news is crucial to watch. Some of the banks you should watch are the U.S. Federal Reserve, the Bank of Japan, the Bank of Canada, the Bank of England, the European Central Bank, etc. Traders should also keep track of what the bankers claim. Bankers’ pronouncements about inflation or deflation can be a helpful clue for defining future Forex market trends.
It is definitely not very easy to keep the track of all this data, even for a single country and it is much harder to keep up with the news of all developed countries of the world. But it is still important to manage having as much information as possible and know how to interpret the data as well as its influence on the market. Try to stay ahead of the market shifts and you will be able to have more winning trades.
In case you decided to participate in forex trading must start from learning the basics of this market to make sure you do not have problems with this industry.
There is another option - you can hire experienced traders to do this job for you - read more about forex investment here. Also make sure to look for the knowledge in a good forex book.
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