Us Forex News

Us Forex News – News trading is becoming increasingly popular among forex traders because it offers opportunities to make large profits in a relatively short period of time. However, just as not all fingers are created equal, not all macroeconomic news events have the same effect on the market. For example, the German Flash Manufacturing PMI will always have a greater impact on the Euro than the French Flash Manufacturing PMI. If you open an economic calendar, you can see in advance which news will have the most impact on the market and the rest can be easily ignored. For example, if you’re trading the Australian dollar, you can easily ignore the Conference Board’s month-to-month reading as it moves AUD/USD or AUD/CAD, and even if it does, it’s likely a move. will win It does not change the current trend. Compared to low-impact news such as the leading CB index, the Australian unemployment rate or the overnight rate set by the Reserve Bank of Australia (RBA) can have a large impact on AUD/USD or any other currency. Australian Dollar So, how do you know which news event to follow out of the hundreds of stories out there? The good news is that, just like the Pareto principle, a handful of news releases are responsible for most of the price movement in most currency pairs. Some of these news events are common to all currencies, and if you can understand how these events affect your favorite currency, you’ll be way ahead of most novice traders who just look at the charts. #1: Unemployment One of the key responsibilities of central banks around the world is to maintain low unemployment rates. The most important monetary policy decision of any central bank is to approach the non-accelerating unemployment NAIRU inflation rate. All major economies release unemployment figures every month and they will be low. The currency will improve. Partly because when the unemployment rate falls below the NAIRU, which is always close to 4.0 percent, central banks start raising interest rates to reduce inflation and slow the economy. This high inflation and high interest rates are strongly correlated with low unemployment rates. Therefore, the unemployment rate serves as a key indicator of future monetary policy decisions. Figure 1: UK and EU unemployment rates Currently, the EU unemployment rate is much higher than the UK unemployment rate. Therefore, a simple analysis shows that the value of the Euro will be higher than the British Pound (EUR/GBP). If you have a consensus forecast that the EU unemployment rate will fall next month but remain unchanged in the UK, you might consider that as bearish news for EUR/GBP. Number 2: Gross Domestic Product (GDP) Growth Rate Gross Domestic Product (GDP) is like a scorecard in a game. It measures the overall health of the economy, and the higher the GDP growth rate, the stronger the currency. If you trade GBP/USD, you can easily determine which way the pair will move in the coming weeks by tracking US and UK GDP growth. Figure 2: GDP growth rates for the United States and the United Kingdom In Figure 2, you can see that the United States’ GDP growth rate is generally closer to that of the United Kingdom. However, one often exceeds the other. Seeing that the US GDP growth rate is higher compared to the UK growth rate, you can interpret it as a bearish signal for GBP/USD. Similarly, if you lower New Zealand’s GDP growth forecast compared to the UK, that would be a big sign for GBP/NZD. Figure 3: Release of GDP data leads to spontaneous inflation Figure 3: Consumer Price Index (CPI) The Consumer Price Index (CPI) measures inflation in the economy relative to the base year. You don’t need to be an economist to understand how inflation affects a particular set of currencies, but some basic understanding will help you go the extra mile. You see, most central banks have a monetary policy that tries to keep inflation within a certain range. When inflation rises above this rate, central banks increase interest rates to curb inflation. Most central banks try to limit inflation to 2.0% and use the CPI to measure it. However, the Federal Reserve, the central bank of the United States, uses the Personal Consumption Expenditure Index instead of the CPI. So, if you’re burning the US dollar and want to predict the future interest rate outlook, use the PCE index. However, any time you see the CPI forecast to rise, it’s big news for the currency. For example, if UK CPI is forecast for the quarter at 2.5% and Australian CPI remains at 1.5%, it will have a significant impact on GBP/AUD. #4: You see overnight interest rates, banks lend money to each other, but they do it overnight. Central banks try to influence the overnight rate by lending money in the money market at their own overnight rate, and this is an important tool in their monetary policy arsenal. The overnight interest rate is a key factor in market volatility, which also affects volatility. In fact, many traders think that the main purpose of fundamental analysis is to predict the future interest rates of major central banks. While monetary policy is difficult to understand even for veteran economists, the way to interpret this news is simple. If you anticipate that the Fed is likely to raise rates overnight, that could have a significant impact on the US dollar. So, for example, if the Bank of Japan rate remains unchanged, it will be bullish news for USD/JPY. #5: US Non-Farm Payrolls (NFP) Data Non-farm payrolls measure the number of additional jobs added in the US corporate sector since the previous month, an important indicator of overall employment conditions in the country. Figure 4: Impact of non-farm payrolls data on EUR/USD USD The US dollar is the global reserve currency, and non-farm payrolls data is usually released by the US Bureau of Labor Statistics (BLS) on the first Friday of each month. ). While there isn’t a comparable data release in every economy, you should definitely keep an eye on the USNFP as it will ultimately have a big impact on all US dollar pairs. If you see that the NFP forecast is higher than last month, that’s great news for the USD. So, for example, there will be a bullish effect on USD/JPY and a bearish effect on EUR/USD. Number 6: Organization of Petroleum Exporting Countries (OPEC) OPEC is basically a global cartel. OPEC countries consist of 15 or 15 major crude oil producing countries such as Saudi Arabia, Kuwait, Iran, etc., currently OPEC countries own 44% of the world’s crude oil and their decision to increase or decrease crude oil production plays a role. It will be basic. Role. Impact on the global energy market Due to the way resources are distributed, there is a strong relationship between the currency market and oil prices. Therefore, BOT can affect the balance and influence the market sentiment. Because of the impact on oil prices, OPEC decisions can move the currency market as it affects global production, and as forex traders you should monitor what OPEC is doing. You see, crude oil is in US dollars because it is the reserve currency. Therefore, any national currency of a country with large reserves of crude oil is affected by the price of crude oil. In addition, lower energy prices mean more disposable income for consumers, creating demand for goods and services and increasing sales. Thus, when OPEC increases production, it increases GDP growth in the United States, which has large oil reserves. But it may not have a significant impact on the Japanese yen because Japan does not have large oil reserves. In this scenario, USD/JPY would rise as lower oil production would be big news for the USD. Although it is difficult to analyze the possible effect of oil prices on a currency, knowing and understanding its effects by studying detailed analysis will allow you to understand market conditions and make better trades.

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