How Economic News Affects the Forex Market

economic news

If you’re an investor, it’s important to stay up-to-date on the latest economic news. You should keep an eye on the latest figures and indicators, including consumer spending, inflation, and unemployment rates. The latest economic news can also help you decide how to invest your money. Here are some highlights of the week’s economic releases.

First, economic news changes rapidly, affecting your investment decisions. You can get the latest headlines from financial websites and newspapers, as well as from economic research firms. You can also subscribe to a financial news feed. Many of these sources provide detailed information about key events in the economy. Some even offer expert commentary about various assets.

Second, economic news from various countries can affect the market. While economic news from one country affects the markets, the importance of one event can change based on the global economy. For instance, a major interest rate decision in the U.S. could be of greater importance than a trade decision, so you should stay up-to-date on current events.

The currency markets react to economic news in different ways. Economic news affecting the United States tends to have the greatest impact. Forex traders can trade the news by looking for consolidation before a big number, then entering a breakout trade when the market breaks out. Another option is to trade exotic options on the news. These options typically have lower volatility than trading a currency pair. The United States dollar is the world’s reserve currency, and 90 percent of all forex transactions involve the U.S. dollar.

Changing economic news is essential for forex traders. It can cause dramatic movements in the currency market, particularly if it indicates lower or higher supply in a country. Besides economic news, currency trading is also affected by speculative pricing. If a country is facing conflict, for example, their currency may suffer a drop in demand. If the economy is strong, its currency may increase in value. If this is the case, it’s best to stay informed about economic news to avoid making costly mistakes.

Economic announcements also impact stock prices. For example, the non-farm payrolls survey, which surveys the labor market, has a significant impact. The Reserve Bank of Australia’s overnight cash rate, and the unemployment rate of Australia are also significant factors. The changes to these figures can affect the AUD/USD market.

While the unemployment rate in the United States is falling, the Federal Reserve’s interest rate is not. The Federal Reserve wants to keep inflation at 2% or less. The Fed is expected to raise interest rates again this year. In other economic news, the Group of Seven has agreed to buy Russian oil at cut-rate prices, but they’ve been unable to marshal their resources. In addition, the Dow Jones Industrial Average posted its worst September since 2002. Moreover, the S&P 500 is heading for its first three-quarter losing streak since 2009.

Traders may also want to monitor the Purchasing Managers Index (PMI). This index is based on surveys of the purchasing managers of major companies in an economy. The survey asks managers about the business outlook, future hiring plans, and workforce size. It also measures the level of inventories. Keeping an eye on this index will help traders to predict market direction.

On Friday, Chinese economic news was mixed. While the official manufacturing PMI for July surprised the market, the Caixin measure showed a contraction in activity. Meanwhile, South Korea’s industrial production dipped more than analysts had forecast. The Reserve Bank of India also raised its benchmark interest rate by 50 basis points.