Forex News
Forex News or Economic News Events are economic indicators issued by various governmental or private agencies with proprietary data sources, such as large banks or payroll services (ADP). These currency news events are generally released on a set schedule, such as monthly or quarterly, on a certain day of the month or so. They differ from Equity Market news, where companies issue their earning’s reports or future projections. Currency News releases affect an entire aspect of the market. A Forex Trader could benefit from the proverbial “heads up” of market direction by learning to interpret the news before and after.
Why do we need to understand Forex News? Because by learning how to interpret them and apply them to our trading, we’ll be on the right side of the market, and if we don’t learn Forex news, we could get caught on the wrong side of the market, and that is not a good thing.
Forex News Demystified
We can generally classify Forex news into three major categories. Based on the market condition at the time, investors may favor one area of the news and ignore others. This is normal as the market is constantly in a cycle, like the fashion industry. So whatever Forex news that is out of fashion today may become the focus of all investors six months later; therefore, we must learn about all of them.
The first category for Forex News is News on Inflation. Any economic news release that could affect inflation, such as the CPI, PPI Input, or the actual Interest Rate decision, is an example of news on inflation. This news category is probably the most important factor influencing currency trading direction.
The second category for Forex News is News on Economy. Economic news events about the economy’s health, whether in the Housing sector, job Market, Retail Sector, Manufacturing, Services, etc… any news that potentially measures the economy. The most prominent Forex news releases in this category are GDP, the Employment rate (NFP in the US), Existing/New Home Sales (US), Retail Sales, Unemployment Rate, and various PMIs (Purchasing Manager’s Index).
Some have a higher impact than others, but one should pay attention to what is “hot or not” based on market sentiment. Home Sales are one example, as investors are fixated on U.S. economic recovery, and real recovery will come only after housing recovers. So the Home Sales data have an exaggerated effect on USD during their releases. The same thing applies to the NFP, with recent Bernanke’s speech on real recovery only after Job’s market recovery. So anything that shows a slight improvement in the job market gets taken out of proportion.
The third category for Forex News is News on Infrastructure. News that gives a clear indication of the infrastructure of the economy, such as the TIC Net Long-Term data, the Trade Balances, Beige Book, etc… These news events have been ignored for the past two years or so as the entire market was concentrating on the interest rate, inflation, deflation, and so on; but mark my words, these news events will soon be back in style, more than ever!
I hope now you understand a little more about Forex News than before. Turn on the TV and watch any financial channels. You’ll see analysts talking about Forex news. If these news events don’t play a huge part in the financial world, as some Forex Traders who only use technical analysis in their trading would say, how would companies such as Bloomberg and Reuters make their livings? They are doing it, everyone that I know is doing it, and you, my friend, should start to pay more attention to economic news that drives the currency market or Forex News.
Hi,
please, i have been trying to know how to interprete the news release but i could not. So, how can i learn the reaction of currency pair when a certain news release has an actual that is greater or less than the dorcast? Can you help me out in detail?
Best regard
zic.
depending on the news, if the news is better, it usually means that the currency will appreciate, if the news is worse, then the currency should depreciate, as a rule of thumb.
Of course when you consider the different status of different currencies, things may not be so straight forward, and to learn more about all of these, I suggest you read my ebook on fundamental trading.
http://www.newsprofiteer.com/forex-currency-news-trading-ebook.html
thanks henry for helping beginer like myself out,
please which website is more accurate with their news release,because there is alot of them and thier release use to be different sometime,
pls help out
I think all of them have the same releases, but the forecast is a bit different. I use multiple sources and average them out, it seems to work.
Henry please help me:
The system i use is simple: What i do is to check the calendar of the day, i select the major data releases, and in the time of the release i am tthere to take advantage ot it in the second after the release to the Market.
For example, if next Monday at 9h00 the Market will know the UK Core Retail Sales i wait the new to be released and in the next second i open a position, if the amout is better than expected i buy GBP USD and if is worst i sell GBP USD.
I am using a Site named Talking-Forex.com to receive via Audia the releses, however i see that there are a lag time of around 3 seconds, i know that the Market know it 3 seconds before me.
So what i would like to know is where can i see that data in real time, i mean, how the market know the news releases before me ?
Do u know where is ?
I use tradethenews.com, which is usually instant. However, it does not matter if you get in one second or five seconds later, as long as you follow the retracement trading method, you are fine.
I like to joint you mailing list
you mean you don’t charge for the service?
hi, i am amazed on how you analyse the market and make good trades i was to subscribe to the SMS and your live trade chart ,but am confused how much should i pay for this ,could you please let me know so that i may subscribe and make the profits you are making and also learn on how to trade like you do ,please.
Thanks ,regards
Kimani Simon -Kenya
I don’t really have any programs open at this moment. So if you get on my mailing list I’ll send you an invite when I have something available.