5 Economic News Releases to Keep Your Eyes on This Friday

The first Friday of every month marks the release of nonfarm payrolls (NFP), a report that affects all currency pairs that use the U.S. Dollar as their de facto reserve currency. If the number comes in above expectations, it is bullish news for the U.S. Dollar. A higher forecast is bearish for the EUR/USD and will have a negative impact on USD/JPY. Listed below are 5 key economic news releases to keep your eyes on this Friday.

Usually, leading economists agree on the level of importance of each economic announcement, but the following three factors have the greatest impact on the market: non-farm payrolls, the Conference Board Leading Index, and inflation. Economic announcements can have a significant impact on the currency pairs they affect, so be sure to stay abreast of the latest news on a regular basis. Even the slightest change in these metrics can affect the value of a currency pair.

The last two articles of this week are from the German and Spanish economies. In April, Spanish retail sales rebounded, and the money supply in the Eurozone unexpectedly declined. Despite these economic developments, the euro and the British pound were slightly lower than they were last month. Both currencies also saw a decrease in bond yields. However, the data show that bad economic news does not have a direct impact on private purchase intentions. Moreover, bad economic news does not seem to alter corporate decisions, although they may assume that consumer behaviour changes.

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The next two charts below illustrate the effects of different types of economic news on currency prices. The first chart shows trading activity after the release of the U.S. jobs report. On Nov. 4, 2005, the market was expecting a gain of 120,000 jobs. However, it only gained 56,000, which was still disappointing. Because of this, the dollar against the euro suffered a 60-pip sell-off. If the jobs report came out a bit higher than expected, the market would likely react by increasing bond yields.

In the United Kingdom, the unemployment rate is expected to stay unchanged next month. This is bullish for the EUR/GBP. Another indicator that affects the value of the GBP/USD currency pair is the growth in GDP. GDP growth is the measure of the health of the country’s economy, and a higher GDP growth rate usually means a stronger currency. Thus, the direction of the GBP/USD currency pair can be predicted fairly easily.

On the global front, geopolitical tensions remain high between the U.S. and China, and the ongoing war in Ukraine continue to cloud the global outlook. In addition, global consumer confidence has sunk to 108.6 in May, while India’s economy has slowed down to 4.1% in the January-March period. These global tensions have a negative impact on global economies. As a result, global growth is on the verge of stagnation.

The latest economic news from the United States showed that consumer confidence eased slightly in May, while global stock markets were generally higher. In addition, U.S. President Joe Biden suggested that trade tariffs with China may be eliminated. Meanwhile, New Zealand’s central bank raised its key interest rate by 50 basis points, raising its Official Cash Rate to two percent from 1.50 percent. With the economic news out, investors are cautious to purchase. The market will continue to monitor and respond accordingly.