FOREX ECONOMIC EVENTS
The Economic calendar is a list of key economic announcements due out of each country which effect the forex market. The countries with the most active currencies in the forex market are given the most attention. Those countries are The USA(Dollar), The Euro Area(Euro), Japan(Yen), UK(Pound), Switzeland(Franc) and finally the less important Autralia(Dollar) & New Zealand Dollar(Dollar).
The economic releases include such activity as Gross Domestic Product(GDP), Unemployment, and interest rates changes which directly affect the forex market.
The reason these activities cause a change in the value of a currency is because a slower or weaker economy leads to reduced sentiment and confidence in the country. This in turns reduces the demand for that specific currency and causes a drop in the value of said currency in the forex market.
Always take into account that all currencies in the forex market are relative. Therefore if two countries are experiencing a downturn it may lead their currencies to remain unchanged against each other but lower relative to another currency e.g. UK and USA both experience a drop in GDP while the rest of Europe is going srong: The GBP/USD will remain the same but the EUR/USD will go up in the forex market.
Another important factor to take into account is that the only time the economic news will affect the forex market in the short term is if it is different from what was expected e.g. The Swiss GDP increased more than the expected amount. However long term trends in the forex market may be found with a country consistently experiencing good economic data.
The forex market becomes highly volatile during news releases and even if you don’t intend trading on the news you would be well advised to be aware of the events in the forex market.
Visit the Economics Calendar to see upcoming events.