Welcome to the TPwithUS Forex Signal and Analysis Site! Here we share, News with a high impact on the Forex market. That means High-impact news refers to economic and financial events that have the potential to affect the forex market significantly.
High-impact Forex news moves markets! Whether you’re an active news trader or not, there’s no hiding from the fact that Forex News is a significant market mover.
Most important high-impact Forex news:
- Central Bank Meetings,
- Unemployment,
- Consumer Price Index (CPI)
- Gross Domestic Product (GDP)
- Unplanned Forex News.
1. Central Bank Meetings
The most important high-impact Forex news releases are central bank meetings and interest rate decisions. With a mandate to control inflation and ensure the value of the nation’s currency remains steady, central bank meetings have the highest impact on Forex market volatility.
Important Meetings:
FOMC, ECB, BoE RBA, BoJ
How often: Monthly
What a central bank, such as the Federal Reserve at their monthly FOMC meeting, chooses to do with monetary policy, has a high impact on Forex markets. In this example, raising rates will likely be bullish for the USD, while a rate cut will likely be bearish. Forex traders are famous for analyzing the slightest change in wording from the previous month’s statement and can quickly send markets into a spin.
2. Unemployment
Unemployment data is released in several forms across different economies, but the highest impact release is undoubtedly the US Non-Farm Payrolls.
Non-farm payrolls report the change in the number of employed people during the previous month (excluding the farming industry, as the name suggests).
Most important release:
US Non-Farm Payrolls
How often: Monthly
The US NFP number is released monthly by the Bureau of Labor Statistics, usually on the first Friday of the month. It’s seen as one of the best indicators of the strength of the US economy and as a result, will prove highly volatile to markets following a release.
This is because unemployment data is important to the Federal Reserve when it comes to setting interest rate policy. If unemployment is high, then the Fed is more likely to cut rates to stimulate hiring.
While the Forex major currency pairs experience the most volatility surrounding an NFP release, any of the most liquid currency pairs will experience similarly wild price action. This is because global markets are so interconnected that when the US economy slows down, the rest of the world is often dragged down with it.
3. Consumer Price Index (CPI)
The consumer price index (CPI) is the change in the price of a basket of goods and services. Put in simple terms, CPI measures inflation.
This is one of the highest impact news releases because as we said above, the main mandate for central bank policy is to control inflation.
Most important release:
US Consumer Price Index
How often: Monthly
When the price of goods and services goes up, this is what’s known as inflation. The highest impact CPI news release comes out monthly, but due to its importance, the data is also compiled into quarterly and yearly readings.
As central banks such as the Fed use the CPI number to track inflation, there is a direct relationship between CPI and interest rate policy. When there’s high inflation, the Fed is more likely to raise rates to try and cool off the economy. When there’s low inflation, the Fed is more likely to cut rates to stimulate growth.
4. Gross Domestic Product (GDP)
A country’s gross domestic product (GDP), shows the annualized change in the inflation-adjusted value of all goods and services produced in the economy.
Most important release:
US Gross Domestic Product (GDP)
How often: Quarterly
The US gross domestic product number is released by the Bureau of Economic Analysis, every quarter. As GDP is released at wide intervals, the bureau also releases preliminary figures at the end of each month.
While a central bank such as the Federal Reserve would never make a final interest rate decision on GDP alone, it does still serve as evidence used to base decisions around. 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.
The same can be said for a GDP number in decline, signaling an economic slowdown that could require rates to be cut.
5. Unplanned Forex News
Sometimes the unpredictable nature of the society we live in means things happen, things that move markets. This section encompasses all other high-impact Forex news releases that you may or may not find on your economic calendar.
Important Examples:
Political speeches, central banker speeches, terrorist attacks
How often: Sporadic
An example may be the US president stepping up to the microphone at a campaign rally for an off-the-cuff announcement of an economic stimulus package. This has the potential to send the US Dollar soaring as fiscal policy affects demand.
Another more sober example is a terrorist attack. If a bomb goes off in a busy underground station, panic soon spreads to markets as traders price in the probability of economic slowdowns and the uncertainty of war.
Thanks for reading the News with a high impact on the Forex market with us, Be informed by the TPwithUS team, and take profit with us in the Forex market.
SOURCE:https://fxssi.com/high-impact-forex-news
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