How important do you think closely following the current news is for trading? If you ask someone, who has been in the trade for long to already have cemented his place as an influencer in the world of Forex, he would actually say it is very important. Why? We will find out in the course of this post. Please make sure you are reading on.
Why should you turn to economic data?
The reason why turning to economic news while trading assumes such an important role is because short-term movements of the currency market are most likely to be influenced by the economic data released after due intervals. The currency market responds not only to the US news but also to news from around the world. Here is how the entire dynamics of world news affecting the currency market are at play.
Important factors to keep in view while trading news
There are around eight major currencies available in the market and 17 derivatives at the same time. Needless to say, there is always some piece of economic data or the other which is poised to release and traders actually make use of these releases to determine the positions they will take in the market. Each and every country in the world has a few very important economic releases that traders should consider without fail. And, what exactly are these releases? Here is a look!
Consumer Confidence Surveys
Reduction in the rate of interest
Business Sentiment Surveys
Surveys associated with the Manufacturing sector
Traders need to focus on a few factors while trading with economic news. For instance, the currencies that they need to consider are the US dollar (USD), British Pound (GBP), Canadian Dollar CAD),Euro (EUR), Australian Dollar (AUD), Japanese Yen (JPY), Swiss Franc (CHF) and the New Zealand Dollar (NZD). The currency list, it can well be seen, covers almost the entire world. Let us tell you that the forex traders can actually pick releases in accordance with the currencies they have chosen to trade with. However, it shouldn’t really be forgotten that almost 90% of the traders choose to trade with the US dollars on one side. As such economic data associated with the US dollar is believed to render the deepest impact on the currency market.
More about Forex news and Trading
As traders might already have understood by now, trading news releases is not at all an easy proposition. Besides handpicking the news releases with due care, traders should also figure out the correct time for these news releases. Here is a rundown of the times when the news releases are published. Do take the trouble of going through the same:
The Japanese Yen – 18:50 – 23:30
The US Dollars- 8:30 – 10:00
The British Pound- 2:00 – 4:30
The Australian Dollar- 17:30 – 19:30
The Canadian Dollar – 7:00 – 8:30
Italian Euro- 3:45 – 5:00
New Zealand- 16:45 – 21:00
Final Words about Trading News
It is not really sagacious on the trader’s part to undermine the importance of news while trading simply because the market continues to respond to the news releases hours and even in some cases days after the important updates are released.