News and Economic Data That Affect Forex Market Movements


The value of a country’s currency is affected and largely influenced by various economic indicators that reflect how a country is performing. The macroeconomic events that take place internally and internationally are factors that will have a huge effect on the value of a currency.

As a forex trader you need to be constantly on top of these data – always ready to read and interpret reports as it is released. You should be able to do this quickly as well because the market immediately reacts to these economic indicators. I know of some forex traders who are on a long position but were caught flat-footed when negative economic data was released that resulted in the currency they were trading in to fall in value. Believe me, it’s not a good position to be in.

One of the most common questions asked by budding traders is what economic data to look out for. The question is understandable since there is a mountain of data that is released on a regular basis.  But among forex traders the following indicators and reports are what they often follow. These are the ones that have a strong effect on currency value movements.

Employment data

Employment data is a strong economic indicator because it shows the level of unemployment in a country. As we all know a high unemployment rate can create a bigger strain on a country’s economy. Among the employment related data you need to follow are: Unemployment Rate, Unemployment Claims, Employment Change, Non-Farm Employment Change.

Economic data

The Trade Balance and the Gross Domestic Product (GDP) of the major economies and currency leaders are quite important and immediately have an impact on the value of a currency the moment it is released.

Other economic data that you should also monitor are those that are closely linked to indicating inflation, e.g., the Consumer Price Index (CPI) and the Producer Price Index (PPI).

Central Bank and Policy Makers

The biggest influencers of market movements are, of course, the announcements and policies made by a country’s central bank and the important monetary authorities. The most important data indicators are the interest rate announcements and monetary policy statements released by the country central banks, for example, the European Central Bank (ECB), Federal Reserve (Fed), and the Federal Open Market Committee (FOMC).

With so many economic data you need to be on top of, it can get confusing if you try to get information from different sources. The best option would be to visit sites dedicated to forex trading strategy. Most of these sites aggregate all of the relevant articles, policy statements and data that have an effect on the forex market. Aside from being a one-stop shop for forex information, most of these sites also feature data analysis and present you with good explanations as to why a recently released set of economic data will be good or bad for certain currencies.
Your favorite forex trading platform will often have its own news and analysis section as well. This is also a good source of information, and it’s also more convenient because you won’t need to visit different sites. It’s all there in one site.

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Editors’ Picks

EUR/USD remains pressured after US data misses estimates

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USD/JPY retakes 110.00 mark, moves back closer to weekly tops

USD/JPY gained follow-through traction for the second consecutive session on Friday. Hawkish Fed expectations pushed the US bond yields higher and remained supportive. A softer risk tone, a modest USD weakness did little to hinder the positive momentum.

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Editors’ Picks

EUR/USD remains pressured after US data misses estimates

EUR/USD is trading closer to 1.1750, paring its recovery from earlier in the day as the safe-haven dollar is bid. US Consumer Sentiment missed estimates with 72 points in September. The financial woes of China's Evergrande are weighing on sentiment.

EUR/USD News

GBP/USD trades under 1.38 amid on UK data, dollar strength

GBP/USD is on the back foot, trading under 1.38 after UK Retail Sales figures disappointed with -0.9% in August, worse than expected. Brexit uncertainty and dollar demand weighed on the pair earlier. 

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Gold struggled to preserve its intraday gains and dropped to the lower end of the daily trading range during the early North American session. 

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Experts say Ripple will win SEC lawsuit, which might propel XRP to new all-time highs

The latest development in the ongoing SEC vs. Ripple lawsuit is that documents are classified as privileged and blocked for public viewing. Though institutional investors are yet to take big bets on the altcoin in 2021, retail investors are actively trading in XRP.

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US Michigan Consumer Sentiment Preview: Markets will have to look hard for positive signs

Consumer outlook expected to rebound to 72.2 in September. August’s 70.2 was the lowest since December 2011. Inflation and Delta variant wearing on US optimism. Markets face negative dollar risk from fading consumer optimism.

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