Economic News for a Trader



Are economic news so useful for a trader, as they say? Are they really that important in trading on the stock exchange, or is their significance too exaggerated, and everything is already included in the price? How to use economic news in trading in order not to lose on price fluctuations, but to gain profit? Where is the best place for a trader to follow the news and market statistics? I will try to answer the questions in this article as detailed as possible. Also, I recommend the best news analyzer for a trader – The News Spy website. I'll show you how to set it up and use it correctly.

As is the case with other asset classes, trading in the stock exchange and the Forex market can become especially active before the release, during the release, or after the release of economic news. For a trader, this is an important time to plan or adjust their trading.

However, there are significant differences between the types of news that affect the price in one way or another. Forex tends to react most to the "big picture" or macroeconomic news – events that reflect or affect the economy as a whole. Traders look at economic news to gauge its impact on interest rates and monetary policy.

Major news releases

Speculators tend to pay attention to some key economic events that may affect the change in the interest rate. The following are especially important:

  • decisions and reports of the central bank;
  • GDP indicators;
  • employment rates;
  • inflation;
  • trade balances;
  • US Federal Reserve meetings;
  • refinancing rate decisions;
  • oil reserves reports.

This type of news release is scheduled well in advance and widely reported. Economic news and market statistics are usually published at a certain time. For example, US nonfarm payrolls are released on the first Friday of each month. Again, to stay tuned  we suggest you to use The News Spy.

Market sentiment and Forex

Market sentiment and Forex

Economic news linked to market sentiment can also affect currencies, especially those considered safe havens such as gold, silver, the US dollar, the yen and the Swiss franc. These currencies attract capital in times of turmoil and fall when markets calm down.

Other news that could affect the foreign exchange market includes stock market returns and volatility, national or continental financial stress, political unrest, elections, treaty negotiations, and other broad news besides economic data and central bank reports. For example: the debt crisis in Greece, the turmoil in the Chinese market, and the cold war between the US and China.

 

Sources: The Fed, Bloomberg, The News Spy.

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