All kinds of traders pay close attention to global events, as such economic calendars are one of the key tools in their fundamental arsenal. Forex traders compare the actual data result with the forecast as well as the previous reading. All https://twitter.com/forexcom?lang=en else being equal the economic news should affect the currency as follows…. However, a deep understanding of what each data point means or an ability to do economic forecasting is unnecessary for forex trading success by trading the news.

But it may not have a significant impact on the Japanese Yen because Japan does not have large oil reserves. In this scenario, the USD/JPY would go up because cutting oil production will be bullish news for the Forex news U.S. If you see the forecast of the NFP is higher compared to last month, it is bullish news for the U.S. So, for example, it will be the bullish impact on the USD/JPY and a bearish effect on the EUR/USD.

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Moreover, the Nixon shock in 1970’s decoupled it from the gold standard. The best way to interpret economic news is to have a trading plan for the week/period ahead. Knowing what data follows is a great advantage ahead of the market. One way to succeed is to use the FX trading calendar correctly.

Once you do that, you’ll see the actuals versus the forecast figures based on the news events and dates graphed https://dotbig-com.medium.com/what-assets-are-worth-investing-in-during-the-third-wave-of-the-pandemic-56bfea8d55a out for you. This can help get a notion of how certain economic indicator has been evolving for a while.

Really solid calendar aspect

This happens in less than a second after the economic calendar FX news comes out. The standard interpretation is that when inflation falls, the currency depreciates. When inflation is in the fall, expectations grow that the Fed will ease the monetary policy. Because there’s a lag between the two Forex news, traders react on the spot. In thecurrencycolumn, you’ll see information about currency pairs that will be affected by the release of particular forex information.

• Everyone knows these days that the ECB has a problem with inflation in the Eurozone.
• Don’t fall for the lies of this scam brokerage, they are dubious scammers posing as professional brokers.
• The Consumer Price Index measures the inflation rate in the economy compared to a base year.
• You see, banks also borrow money from each other, but they do it on an overnight basis.

Effectively, it trips stops both for longs and for shorts. You can also get access to breaking news when you need it so that you can be aware of new information that could impact your trades.