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Forex indicators: Why you must keep an eye on economic indicators when trading forex

by , 05 August 2015

Many forex traders use technical analysis with much success to find trades. But you can't ignore the impact of economic data and news on currencies.

So what impact can economic announcements have on your forex trades? And what economic data and news should you watch out for?

Let's take a closer look…


Why you need to know about economic indicators when trading forex


There are a number of economic indicators that can have an impact on exchange rates. And this means you need to know when they’re coming out.

Economic data releases and announcements are important forex indicators.

By knowing when they’re due for release you can ensure you don’t lose money on any forex trades you have open. You should check when key announcements are due out when placing your forex trades.

It’s easy to find out when these key economic announcements are. You just need to look at a trading calendar, like this one.


What economic indicators you need to know about when trading forex


Economic announcements and data releases are ongoing. Somewhere around the world, economic data and news is coming out.

Some of these announcements won’t have a large bearing on exchange rates, but others will.

The key economic indicators you need to watch are:

  • Economic growth rates;
  • Interest rate decisions;
  • Consumer inflation rates;
  • Rate of unemployment; and
  • International trade data.

These key economic indicators can affect the supply and demand of currencies. In other words, they can affect exchange rates.

If you trade the major currencies, you need to keep abreast of the economic indicators coming out of these countries.

If an economic indicator comes out better or worse than forecast, there’s a chance of a bigger impact on the related currencies.

So there you have it. Why you must keep an eye on economic indicators when trading forex.

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Forex indicators: Why you must keep an eye on economic indicators when trading forex
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