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Working on Forex, you should know that any currency’s price is influenced by various economic factors. Also, the currency’s exchange rate depends on the macroeconomic situation of the country it is used in. To be successful, traders should always follow the information and understand reports published by regulators. The forex market immediately reacts to the economic news.
Let’s see which economic events should be taken into account when analyzing the current situation on Forex. The result of any piece of news is the market’s reaction to it. It can be positive, negative, or neutral. The impact made by news primarily depends on investors’ expectations, which may meet or not the final data.
If the released data is against the market trend, the reaction to the event lasts for several hours. If the data matches the trend, the latter will strengthen with a possibility of pullback. Economic news is revealed by the world’s leading news agencies: Reuters, Bloomberg, Financial Times, CNN, and CNBC. As a rule, they publish the time of the expected macroeconomic release on their official websites. Having the economic calendar at hand, you always can forecast the market movement relying on the statistic data. You also have an opportunity to react to the market changes in time. Below, you can find a list of the main macroeconomic indicators, publication of which directly affects the financial market dynamic.
Gross National Product
Importance: 1;
Released by: the US Bureau of Economic Analysis (BEA);
Due: 20th-30th of the month;
Frequency: quarterly report (monthly revised);
Volatility: medium;
Comment: One of the most important economic indicators as it fully shows economic activity.
Gross Domestic Product
Importance: 1;
Released by: the US Bureau of Economic Analysis (BEA);
Due: 20th – 30th of the month;
Frequency: quarterly report (monthly revised);
Volatility: medium;
Comment: One of the major economic indicators as it reflects total economic activity.
Trade Balance
Importance: 1;
Released by: the US Bureau of Economic Analysis (BEA), U.S. Department of Commerce;
Due: 15th – 17th of the month;
Frequency: monthly;
Volatility: moderate;
Employment and Unemployment rates
Importance: 1;
Released by: the US Bureau of Labor Statistics, the United States Department of Labor;
Due: 1st – 7th of the month;
Frequency: monthly;
Volatility: medium;
Comment: The indicator makes it possible to forecast other economic indicators’ data.
Industrial Production and Capacity Utilization
Importance: 2;
Released by: Board of Governors of the Federal Reserve System;
Due: 14th – 17th of the month;
Frequency: monthly;
Volatility: low;
Market reaction: The indicator has a slight influence on currency exchange rates that depends on the current economic situation.
Retail Sales
Importance: 2;
Released by: the US Bureau of Economic Analysis, BEA, U.S. Department of Commerce;
Due: 9th – 16th of the month;
Frequency: monthly;
Volatility: medium;
Market reaction: Influence on the exchange rates depends on the economic situation.
Comment: It is the indicator of the inflation rate.
Producer Price Index
Importance: 2;
Released by: the US Bureau of Labor Statistics, the United States Department of Labor;
Due: 9th – 16th of the month;
Frequency: monthly;
Volatility: medium;
Market reaction: impact on the exchange rate bears on the economic situation;
Comment: If it is released together with CPI, the importance of PPI raises to 1. It reflects the inflation rate.
Consumer Price Index (CPI)
Importance: 2;
Released by: the US Bureau of Labor Statistics, the United States Department of Labor;
Due: 15th – 21tst of the month;
Frequency: monthly;
Volatility: moderate;
Market reaction: The effect on the exchange rate depends on the economic situation.
Comment: If it is published with CPI the importance of PPI increases to 1. It is the indicator of the inflation rate.
Personal Income and Consumption Expenditures
Importance: 2;
Released by: the US Bureau of Economic Analysis (BEA), U.S. Department of Commerce;
Due: 22nd – 31tst of the month; Frequency: monthly;
Volatility: moderate;
Comment: Personal consumption is essential as it determines most of GDP.
Car Sales
Importance: 3;
Released by: car producers;
Due: first and third day after the period ends;
Frequency: monthly;
Volatility: medium;
Comment: It is one of the first published indicators of the month. It is a leading indicator that shows future changes in economic growth.
National Association of Purchasing Manager's Index (NAMP)
Importance: 3;
Released by: National Association of Purchasing Management;
Due: 1st working day of the month; Frequency: monthly;
Volatility: medium;
Comment: The indicator estimates the whole manufacturing sector of the economy.
Durable Goods Orders
Importance: 3;
Released by: the US Bureau of Labor Statistics, the United States Department of Labor;
Due: 19th – 27th of the month;
Frequency: monthly;
Volatility: very high;
Market reaction: weak.
New Home Sales
Importance: 3;
Released by: the US Bureau of Economic Analysis (BEA), U.S. Department of Commerce;
Due: 28th of the current month and 4th of the following month;
Frequency: monthly;
Volatility: moderate;
Comment: It is the leading indicator. In winter, the indicators volatility goes up.
Construction Spending
Importance: 3;
Released by: the US Bureau of Economic Analysis (BEA), U.S. Department of Commerce;
Due: 1st working day of the month;
Frequency: monthly;
Volatility: high;
Comment: The revised data may differ significantly.
Factory Orders and Manufacturing Inventories
Importance: 4;
Released by: the US Bureau of Economic Analysis (BEA), U.S. Department of Commerce;
Due: last days of the month;
Frequency: monthly;
Volatility: very high;
Market reaction: weak.
Let’s see which economic events should be taken into account when analyzing the current situation on Forex. The result of any piece of news is the market’s reaction to it. It can be positive, negative, or neutral. The impact made by news primarily depends on investors’ expectations, which may meet or not the final data.
If the released data is against the market trend, the reaction to the event lasts for several hours. If the data matches the trend, the latter will strengthen with a possibility of pullback. Economic news is revealed by the world’s leading news agencies: Reuters, Bloomberg, Financial Times, CNN, and CNBC. As a rule, they publish the time of the expected macroeconomic release on their official websites. Having the economic calendar at hand, you always can forecast the market movement relying on the statistic data. You also have an opportunity to react to the market changes in time. Below, you can find a list of the main macroeconomic indicators, publication of which directly affects the financial market dynamic.
Gross National Product
Importance: 1;
Released by: the US Bureau of Economic Analysis (BEA);
Due: 20th-30th of the month;
Frequency: quarterly report (monthly revised);
Volatility: medium;
Comment: One of the most important economic indicators as it fully shows economic activity.
Gross Domestic Product
Importance: 1;
Released by: the US Bureau of Economic Analysis (BEA);
Due: 20th – 30th of the month;
Frequency: quarterly report (monthly revised);
Volatility: medium;
Comment: One of the major economic indicators as it reflects total economic activity.
Trade Balance
Importance: 1;
Released by: the US Bureau of Economic Analysis (BEA), U.S. Department of Commerce;
Due: 15th – 17th of the month;
Frequency: monthly;
Volatility: moderate;
Employment and Unemployment rates
Importance: 1;
Released by: the US Bureau of Labor Statistics, the United States Department of Labor;
Due: 1st – 7th of the month;
Frequency: monthly;
Volatility: medium;
Comment: The indicator makes it possible to forecast other economic indicators’ data.
Industrial Production and Capacity Utilization
Importance: 2;
Released by: Board of Governors of the Federal Reserve System;
Due: 14th – 17th of the month;
Frequency: monthly;
Volatility: low;
Market reaction: The indicator has a slight influence on currency exchange rates that depends on the current economic situation.
Retail Sales
Importance: 2;
Released by: the US Bureau of Economic Analysis, BEA, U.S. Department of Commerce;
Due: 9th – 16th of the month;
Frequency: monthly;
Volatility: medium;
Market reaction: Influence on the exchange rates depends on the economic situation.
Comment: It is the indicator of the inflation rate.
Producer Price Index
Importance: 2;
Released by: the US Bureau of Labor Statistics, the United States Department of Labor;
Due: 9th – 16th of the month;
Frequency: monthly;
Volatility: medium;
Market reaction: impact on the exchange rate bears on the economic situation;
Comment: If it is released together with CPI, the importance of PPI raises to 1. It reflects the inflation rate.
Consumer Price Index (CPI)
Importance: 2;
Released by: the US Bureau of Labor Statistics, the United States Department of Labor;
Due: 15th – 21tst of the month;
Frequency: monthly;
Volatility: moderate;
Market reaction: The effect on the exchange rate depends on the economic situation.
Comment: If it is published with CPI the importance of PPI increases to 1. It is the indicator of the inflation rate.
Personal Income and Consumption Expenditures
Importance: 2;
Released by: the US Bureau of Economic Analysis (BEA), U.S. Department of Commerce;
Due: 22nd – 31tst of the month; Frequency: monthly;
Volatility: moderate;
Comment: Personal consumption is essential as it determines most of GDP.
Car Sales
Importance: 3;
Released by: car producers;
Due: first and third day after the period ends;
Frequency: monthly;
Volatility: medium;
Comment: It is one of the first published indicators of the month. It is a leading indicator that shows future changes in economic growth.
National Association of Purchasing Manager's Index (NAMP)
Importance: 3;
Released by: National Association of Purchasing Management;
Due: 1st working day of the month; Frequency: monthly;
Volatility: medium;
Comment: The indicator estimates the whole manufacturing sector of the economy.
Durable Goods Orders
Importance: 3;
Released by: the US Bureau of Labor Statistics, the United States Department of Labor;
Due: 19th – 27th of the month;
Frequency: monthly;
Volatility: very high;
Market reaction: weak.
New Home Sales
Importance: 3;
Released by: the US Bureau of Economic Analysis (BEA), U.S. Department of Commerce;
Due: 28th of the current month and 4th of the following month;
Frequency: monthly;
Volatility: moderate;
Comment: It is the leading indicator. In winter, the indicators volatility goes up.
Construction Spending
Importance: 3;
Released by: the US Bureau of Economic Analysis (BEA), U.S. Department of Commerce;
Due: 1st working day of the month;
Frequency: monthly;
Volatility: high;
Comment: The revised data may differ significantly.
Factory Orders and Manufacturing Inventories
Importance: 4;
Released by: the US Bureau of Economic Analysis (BEA), U.S. Department of Commerce;
Due: last days of the month;
Frequency: monthly;
Volatility: very high;
Market reaction: weak.
