The Forex economic calendar is one of the principal tools used in fundamental analysis. This is the list of major forex economic events that can influence foreign exchange rates.
Learn in-depth about the important economic events that traders track, how they influence foreign exchange rates, and how you can make money by trading the news.
I know what you are thinking if you are not familiar with Forex Economic Calendar. So, let’s learn together?
What is Economic Calendar?
It includes monthly, quarterly, and annual statistic figures on a country’s financial flexibilities and indicators such as budget, payment balance, discount rate as well as the information on commodity and financial markets.
Advantages of the economic calendar:
- It notifies you about when (date and time) and in which country fundamental news will be released. It is a trader’s own decision on how to interpret and use the news.
- Due to the calendar, a trader is informed about when and in which country a national holiday is celebrated, which is a bank holiday.
- It ranks major news according to their importance, showing an analytical forecast of the report.
- Right after the news has been released and the market has reacted, it helps to analyze the impact of the fundamental factor on investors’ opinions.
Ways to use the economic calendar in Forex Trading
Fundamental analysis suggests forex trading based on economic data releases. Macroeconomic and sectoral statistics, economic indicators, central banks’ statements, other economic reports are the factors that can radically change the market sentiment.
And remember, these factors can influence the forex rates, commodities or securities.
Traders like fundamental analysis and the forex fundamental announcements calendar because it, unlike technical analysis, doesn’t require deep knowledge of technical indicators.
So, news trading is suitable for all investors. The primary tool of “fundamental” traders is the economic calendar, whose strong sides are in this review.
Practical application of FX economic Calendar
The economic fx calendar is the list of upcoming events (calendar of events) grouped by countries, importance (the strongest impact on forex rates), and so on.
Moreover, an event, scheduled in the daily economic calendar, which goes on in a country directly influences its local currency and market conditions.
The most important events in the USA that affect the value of assets:
- Fed’s decision on the federal funds rate changes (frequency: 1-3 times a year). It influences investors’ interest in the US currency. An interest rate rise results in the growth of the USD value relative to other currencies.
- Provincial payrolls (monthly US jobs report). You can learn how this report affects foreign exchange rates and how to make money using nonfarm payrolls here.
Other important events that influence Forex rates:
- ECB’s monetary policy decisions. It determines the future policy concerning inflation, issuance of bonds, volumes of money supply, interest, and deposit rates.
- Macroeconomic statistics. It covers the balance of payments, GDP rate and industrial production, inflation rate, price indexes, and other economic data. It affects the value of the local currency versus the US dollar.