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Monday, July 1, 2013

Forex news

This is the second post on the topic of Forex. I want to discuss the second best topic on Foreign Exchange market and that is Forex news. This is the driver of most strong market moves that are inspired by fundamental news releases. Most people would advise you against trading fx events and they might be right. Newbie traders get burned when they try to capitalize on Forex volatility and enter the market that is inspired by this or that macroeconomic event. Old and experienced traders know what it is to have an open position and get burned when market turns against you and you are in a loss of thousands of pips.

You can go to any Forex provider, find economic calendar on their page and check what important news events are scheduled for the week. Some of the most famous websites to do that could be dailyfx, Forex factory, investing.com, fxstreet, myfxbook, forexyard or forexpeacearmy. Choose the one you like most, or two and each Sunday check what events are to be released on the coming week.

What are some of the most important Forex news releases? The first would be interest rate decision. Most central banks do it once a month or once in two months. This is the key to fundamental analysis in currency trading. Quite often these are followed by press conferences where central bankers share their view of economy. In most cases these post release events are even more important than the events themselves.
Consumer price index would be second, because it measures inflation in a country and as you know inflation is very much connected to increasing or cutting interest rates.

Producer price index comes next as it directly influence consumer price index and might be a generator of inflation.

Retail sales, although not so important it does create big market moves from time to time. Employment indicators are of high importance as they measure the health of employment sector and of global economy on the whole. Non Farm payrolls should be mentioned separately as it is the biggest driver in employment numbers. By the way, it is coming this Friday.

Other less important, because they create less volatility are: consumer confidence data, durable good orders, beige book and a few more. Some data has no influence to the markets at all.


So, next time you think about opening a trade look at the calendar if there are no economic releases scheduled in the horizon.   

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