Forex News With High Impact You Must Know
HIGH IMPACT NEWS
Central banks monthly decisions on the monetary policy have have huge impacts on financial markets. Central banks must maintain low unemployment rate near the Non Accelerating Inflation Rate of Unemployment. Generally lower unemployment rates results in strong currency’s valuation. the accompanying statement that goes alongside any decision made on the central bank meeting is the most important one. After the release, traders sell the currency in relation to other currencies when the rate is more than expected or vice versa.
Gross Domestic Product
It shows the overall health of an economy, the higher the GDP the stronger the currency. Gross domestic product (GDP, shows the annualized change in the inflation-adjusted value of all goods and services produced in the economy, released Quarterly by the Bureau of Economic Analysis. If GDP is trending higher, then it’s a good indication that the economy is growing and interest rates could be on the way up and vice versa. Traders are more likely to see a sell a domestic currency in relation to other currencies if the GBP is lower than expected.
Organization of the Petroleum Exporting Countries (OPEC)
The 15 major crude oil producing nations that control 44% worldwide. Some of the countries are Congo, Libya, Venezuela, Saudi Arabia, Algeria, Congo. Oil prices affect the balance of trade of a currency in that low energy price boost sales which increase production, GDP increase and ultimately currency strength.
U.S Non Fam Payroll (NFP) data
Measures the number of additional jobs added from the previous month in the corporate sector in America, and it affects all major currencies. The US NFP number is released monthly by the Bureau of Labor Statistics, usually on the first Friday of the month. If unemployment is high, then the Fed is more likely to cut rates in order to stimulate hiring. If the payroll figure is high its good for the U.S economy whereas if its low the impacts to the US economy is negative affective the US dollar. Traders buy strength the sell weakness.
The Purchasing Managers Index (PMI)
The survey are based on key managers perspective over a 6 month period. If the PMI goes below 50, it indicates a recession. The economy expands if it moves above 50. Traders expect to buy and sell from opportunities created by changes in the PMI.
Consumer price Index (CPI)
The Consumer Price Index (CPI) released monthly by the US Bureau of Labor Statistics. It measures the inflation rate in the economy compared to a base year. Inflation occurs when price of goods go up as services go down. The higher the inflation, the higher CPI and the lesser the worth of the currency.
Retail sales reports are usually issued on a monthly basis. An increase in retail sales lead to an increase in the value of a currency. Traders buy strength and sell weakness hence a decrease in low retail markets also reduces the value of a currency which provide both buying and selling opportunities in the forex market.
15 TO 18% of the US Economy is in the housing sector. Hence positive housing data from vital statistics makes the currency strength stronger or bullish.
Overnight Interest Rates
Banks borrow money from each other on an overnight basis which influence the overnight rate by lending in the money market at their own overnight rate, which is an important tool in their monetary policy arsenal. A forecast that says the Federal Reserve will likely increase the overnight rate, it will likely have a bullish effect on the U.S. Dollar.