Every trader understands that the biggest threat they face in forex trading is volatility. There is no need to wonder why any trader will require the top 5 news events for forex trading as the answer is easy. The markets move as if they have a mind of their own. They create a course and a basic need for information and research that turns a forex trader from a gambler to a professional trader. 

The top 5 news events for forex trading are a number of some of the best and quality sources that traders can use to get the most recent developments in the world economy. There exist different financial reports and events that occur at any given time. Understanding these events, when they occur, and what they are can help you get an edge on your forex trading. 

Here are the top 5 news events for forex trading. 

#1 Gross Domestic Output

One of the most vital indicators of the currency and its movement is the Gross Domestic Output (GDP). This is a major event when it comes to the top 5 news events for forex trading because it affects every country and affects their currency as well. 

GDP affects the forex market by affecting other factors that either expand the country’s economy or create a recession. Expansion of the economy occurs when the country’s GDP, say the USA, goes up. It affects the dollar in that the dollar and its value, compared to the other currencies, will also go up. A recession, however, would cause the dollar to lose value. 

Now, when it comes to forex trading, GDP allows the trader to understand the direction a currency would take. GDP reports are released quarterly, bi-annually, or annually. Experienced forex traders understand that it is an important event, but its effects can be predicted or felt before the report is released. 

#2 Consumer Confidence Index

The Consumer Confidence Index is one of the best reports that any forex trader can follow. The Consumer Confidence Index had to be among the top 5 news events for forex trading because it is a breakdown of the demand and supply in the country. 

If you are a trader, you understand that among the most traded currencies in the world is the US dollar. For this reason, forex traders must keep in touch with what is happening in the USA unless they do not trade with the US dollar. 

The Conference Board releases the Consumer Confidence Index, and its report is provided to the general public at the end of each month. It helps the forex trader understand how strong the currency will be or how weak it will be by looking at the behavior of the consumers. The report shows how willing people are to spend or hold their money. 

On the other hand, the Consumer Sentiment Index is released twice every month by the University of Michigan. It works the same way as the Consumer Confidence Index; the two are valuable assets to forex traders. 

#3 Purchasing Managers Index (PMI)

It is crazy the number of reports a trader should consider when it comes to forex trading. However, only a few reports can make it to the top 5 news events for forex trading that come close to this report. Are you wondering why?

Well, the PMI is a report that is released every month by the Institute of Supply Management. The report looks at the production, employment environment, supplier deliveries, inventory levels, and production. These are all considered by some of the major companies in the market and represent the country’s economic health. 

As a forex trader, understanding this report helps a trader understand how good or bad the dollar is doing. After every release of the PMI, a trader should get to compare the PMI against the previous value released in the past month. A higher value means growth, no change means an economy that is not growing, and a lower value means a drop in economic activity. By understanding this, you can now use this report to know how the currency will go. 

#4 US Federal Funds Rates

Every year, the US Federal funds rates are always going to be considered thanks to the Federal Open Markets Committee (FOMC) meetings that are held. The meeting that occurs eight times yearly is in the top 5 news events for forex trading because of the important monetary policy created in the meetings. 

Before these meetings release the reports, market analysts often have predictions of the monetary policy that will be released by the end of the meetings. Thus, when the reports deviate from the expected monetary policy, serious effects occur on the financial markets. It affects the interest rates of the currency and can be used as a predictor of the currency’s movement.  

Forex traders should have information on when the meetings will take place so that after the reports are released, they have a better idea of the currency movement. 

#5 US Non-Farm Payrolls (NFP)

This is another major report that had to be included in our list of the top 5 news events for forex trading. The NFP is a statement released on the first Friday of every month. It has a lot of effect on the financial market because it acts like a mini-GDP report. 

The only difference between the GDP report and the NFP report is that the GDP is released a few times a year, unlike the NFP report. This report helps the forex trader understand the employment levels of the country and the business cycle it has. It is a report that greatly influences monetary policy. 

Thus, regarding the top 5 news events for forex trading, this is one report you should not miss out on. 

Bottom Line

Forex trading is a profession that requires a lot of research that is carried out based on the financial markets and news that affect the way that the forex currencies will go. Thus, the top 5 news events for forex trading are reports that put a forex trader at the front of what is expected to happen in the market. 

Get an edge on forex trading by going through these top 5 news events for forex trading. 

Have fun trading!

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