If you are a follower of news trading strategy, you will be very interested in these types of influential Forex news. Following this important news will help you to better shape your trading style. In this article, we have compiled the Forex news that is essential for your trading journey. Let's discover it right now.
May you concern:
Why is Forex news important?
Before we delve into the different types of Forex news, let's learn about why this news is so important. Forex news is important because it can create dramatic fluctuations in the market. In addition, it also affects the value of currencies. Here are some reasons why forex news matters:
Impact on interest rates and monetary policy
Central bank interest rate decisions have a significant impact on the value of money. The bank raises interest rates that make the country's currency more attractive to foreign exchange investors and traders.
Impact on market sentiment
Economic and political news can create fear or good news in the market. This lead to a change in the buying and selling situation. Market sentiment can alter a currency's value in the short term.
International events and politics
International events such as trade, political upheavals, conflicts and international agreements can affect the financial and economic situation. Therefore, this will affect the value of money.
Economic Data and Economic Performance
Economic indicators such as GDP, unemployment rate, industrial production, and consumption can provide information about a country's economy. Variations in economic data can create extreme volatility in the Forex market.
In summary, forex news are factors that cannot be ignored because they create volatility and opportunities in the Forex market. Traders need regular updates to make informed trading decisions and better understand market conditions.
Important Forex news
Non-Farm Payrolls (NFP)
The first Forex news that we want to mention is Nonfarm news. Nonfarm or Nonfarm Payrolls (abbreviated NFP) is an important economic index related to employment in the United States. It does not include people who work for farms, the federal government, private households, and nonprofit organizations.
The NFP report is usually released on the first Friday of each month. It provides the total monthly gain or loss of paid U.S. workers across most businesses. The growing number indicates economic expansion but may also cause investors to worry about inflation.
Learn more about NFP information here.
Monetary Policy of the FOMC
The second Forex news that you need to pay attention to is the monetary policy of the FOMC. The Federal Open Market Committee (FOMC) is the monetary policy decision-making body of the United States Federal Reserve System. The Federal Reserve, or the Central Bank of the United States, is the central bank of the United States. It is responsible for administering monetary policy and supporting the nation's financial stability.
The FOMC consists of 12 members, including 7 members from the Federal Reserve Board of Governors (including the Chairman of the Reserve Bank) and 5 other members from the Federal Reserve Banks. They meet about eight times a year to review the economic situation, analyze data, and make monetary policy decisions.
The FOMC's main decisions are the setting of the federal funds rate target and the decision on the trading of government securities and bonds in open market operations. These decisions can significantly affect economic activity and financial markets in the United States.
>> See more about FOMC here.
The third Forex news is also one of the factors that affect the volatility of the currency's value, which is the inflation index. The Consumer Price Index (CPI) is used to measure the change in the prices of a fixed basket of consumer goods and services over a specific period of time.
The rise and fall of the inflation index can create the following important effects on the forex market:
1. Impact on monetary policy: Increasing inflation may prompt the central bank to raise interest rates to control inflation. Higher interest rates can make that country's currency more attractive, leading to an increase in the currency's value in the forex market.
2. Impact on market sentiment: A big change in inflation can create uncertainty in the market. Concerns about high inflation can reduce investor confidence and cause volatility in currency trading.
3. Impact on the trading plan: Information about inflation may affect the trading plans of investors. Traders can adjust their strategies to reflect expected changes in inflation.
>> See more interesting facts about inflation here.
Interest rates play a significant role in the foreign exchange (forex) market and can have a substantial impact on currency exchange rates. Here's how interest rates affect forex:
1. Interest rate differential: The interest rate differential between two countries' currencies is a primary driver of exchange rate movements. When there is a difference in interest rates between two countries, it can influence the flow of capital between them. Currencies with higher interest rates tend to attract more investments from foreign investors seeking higher returns. As a result, the demand for that currency increases, leading to an appreciation of its value relative to other currencies.
2. Central bank policies: Central banks play a crucial role in determining interest rates. When a central bank raises its interest rates, it makes investments denominated in that currency more attractive. This often leads to an increase in demand for the currency and can result in its appreciation. Conversely, when a central bank lowers interest rates, it may lead to a decrease in demand for the currency and potentially cause its depreciation.
3. Inflation and purchasing power: Interest rates can also impact inflation and purchasing power. Higher interest rates can attract foreign capital inflows, which can lead to increased demand for the currency. This demand can drive up the currency's value and contribute to lower import costs, potentially leading to lower inflation.
4. Market sentiment and expectations: Interest rate decisions by central banks are closely watched by traders and investors. Market sentiment and expectations about future interest rate changes can lead to speculative trading. If a central bank's decision aligns with market expectations, the impact on the forex market may be muted. However, surprises in interest rate decisions can lead to significant currency movements.
5. Economic growth and trade balance: Higher interest rates can lead to increased borrowing costs for businesses and consumers. This can potentially slow down economic growth, impacting trade balances and affecting the supply and demand dynamics of a currency.
It's important to note that interest rates are a significant factor in forex markets. Exchange rates are influenced by a complex interplay of various economic indicators, geopolitical events, market sentiment, and other factors. Traders and investors need to consider a wide range of variables when analyzing and predicting forex market movements.
Gross Domestic Product (GDP)
The next important Forex news is about GDP (Gross Domestic Product). This is one of the important factors affecting the forex market. GDP measures the value of a country's gross product over a specific period of time. Changes in GDP news can have important effects on the market.
This is considered an indicator of the economic health of a country. Similar to the Nonfarm Index, rising GDP will result in rising interest rates. When interest rates increase, it will attract more foreign investors and the dollar will also increase. That is one of the effects of GDP on the value of currencies.
This Forex news will be released by the Bureau of Economic Analysis which will release GDP data at 8:30 a.m. on the last day of each quarter (EST).
Some other important Forex news and how to read them
In addition to the above 4 Forex news, there are other essential news indexes such as Trade balance, Retail index, and Index of industrial production (IIP). These news also significantly affects the volatility of the US Dollar.
There are many news sources and websites you can follow to stay up to date with the forex market. Here are some popular sources you can refer to:
1. Bloomberg: Bloomberg provides daily economic, financial and market news, including news about the forex market.
2. Forex Factory: This is a website that provides an economic calendar, news and analysis of the forex market.
3. Investing.com: A website that provides information on the financial markets and forex, including charts and technical analysis.
4. CNBC: This financial television channel provides news and analysis on the global financial markets, including the forex market.
5. VN Forex: Forex, crypto Information page, constantly updated news about the fluctuations of currencies. At the same time, this site also provides free trading lessons and experiences.
To trade successfully you must prepare yourself with a lot of skills from fundamental analysis to technical analysis. Updating and analyzing Forex news will give you more basis to predict the next direction of the price.
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