As with other asset classes, forex trading news can become particularly active before and following major economic events. However, there are significant differences between the type of news that sets apart currencies from other financial markets. When trading on news releases, it is important that you are aware of how financial markets work. This happens because traders attempt to predict the results of future news announcements and so, in turn, the market responds by changing the price of an asset. News-based trading is especially useful for volatile markets, for example oil trading. Some of the world’s largest central banks are about to make their final rate decisions of the year, while offering their updated policy outlooks for 2023. Certain major economic announcements can bring additional volatility in the markets, even if it is for just a short period of time.
Trading on news releases can, therefore, prove vastly beneficial to traders and can significantly strengthen their trading strategy by adding economic announcements to their purely technical and charting approach. Learn how to trade the news and spot potential trading opportunities within the financial markets. Recent examples include the Greek debt crisis and China market turmoil. In order to read news events, you should familiarise yourself with economic indicators, Forex which are macroeconomic factors that have an impact on all financial markets, whether it be forex, shares or indices. These can include changes to interest rates, inflation, unemployment levels or retail income for a specific country and these all have a significant effect on the financial markets and overall state of the economy. As discussed, our online trading platform, Next Generation, releases regular news and analysis articles for all financial markets.
ANALYSIS-Investors on alert for policy error after cheering slower rate hikes
We also provide fundamental analysis reports from Morningstar, as well as market commentaries and updates from Reuters news on our news and insights section of the platform. By following our news, this ensures that you are always up-to-date with the latest trends and changes within the financial markets, as well as general economic announcements. In general, news that has a significant impact on individual company shares may not have a major impact on currencies. Stock market news that has little or no impact on currencies includes earnings reports, management changes, mergers and acquisitions and partnerships. Therefore, it may be easier for some to make more reliable https://www.ig.com/en/forex/what-is-forex-and-how-does-it-work trading predictions on how the market will perform.
Experience our FOREX.com trading platform for 90 days, risk-free. Today’s NFP report is the main event for traders, and the consensus forecasts is for headline job growth to soften to 200k , and the unemployment rate remain at 3.7%.
It can help to increase volatility
Traders should be aware that demand for many commodities – and therefore the commodity’s price – rises and falls with the seasons. Seasonal forex trading news and impacts tend to be seen in energy and agricultural commodities, but less so for precious metals. The table below shows some of the main resource currencies and the commodities that affect them. These can be used by traders as a sort of DotBig LTD trading signal, as it can help to predict where the price of the currency is headed. Forex markets tend to respond the most to macroeconomic news – the kind of developments that reflect or impact broad economies. Generally speaking, forex traders can look at economic news to assess its impact on interest rates and monetary policy. News that suggests a more hawkish central bank tends to push forex pairs up in value relative to other currencies, while dovish news can cause a currency to depreciate.
- USD/CAD made a large move higher today, though it doesn’t seem like it was based on fundamentals.
- Learn more about how market economies operate, the political theory they’re founded on, and whether they work in our guide.
- Traders can perform company analysis before deciding whether to invest in a stock.
- If Core PCE continues to fall over the coming months, the Fed may end up hiking rates less than it expects, or even cutting rates before the end of next year.
- Opinions expressed herein are those of the authors and not necessarily those of OANDA or any of its affiliates, officers or directors.
US Two blockbuster events will have Wall Street on edge as the disinflation trade may have gotten… President Joe Biden reacted to Arizona Senator Kyrsten Sinema’s decision to leave the Democratic Party to become an independent, press secretary Karine Jean-Pierre said the White House understood her decision. By Skerdian Meta, Lead AnalystThe gold price fell to nearly $1,787 in the Tokyo session after failing to hold above the important resistance level of $1,805.00. Coupled with fresh falls in world oil prices, investor concerns deepen. Chainlink connects a $7 trillion a day industry to the decentralized finance space by partnering with CenterPrime.