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Most Watched Economic Releases In the Forex Market

The most popular economic indicators in the forex market have the ability to cause swings of several hundred pips in either direction if they come out at numbers that are different than what is expected. This is what makes trading during news an exciting and popular, albeit risky strategy.

For most, these releases come out at 8:30am ET although members of the press have it at 8:00am under security lockdown.

1. The Jobs Report aka Non-Farm Payrolls aka NFP

Published on the first Friday of each month with the data from the previous month, it is the single most important statistic on the health of the US economy. To keep up with population growth we need to add 125,000 jobs a month to keep, so if the numbers come in under that, the news is often treated as bad news. The market often prices in estimations before the number is released so traders often look for huge swings from what it is expected as well as major revisions of the previous month.

Publish date: First Friday of every month at 8:30 am.
Revisions: Previous two months are revised which can be a major market mover. The NFP benchmark changes every 10 years
Reporting Agency: Bureau of Labor Statistics, Department of Labor (U.S.)
Release: NFP Release Data

2. CPI aka Consumer Price Index

Measures the change in the value of a group of goods and services against the value of the US dollar. CPI is broken up into two main categories the core-CPI and non-core CPI. Core CPI, which is more watched than non-core CPI excludes food and fuel prices as they can vary dramatically from month to month.

Inflation is incredibly important for the forex markets for several reasons. Most fundamentally, it is the cost of holding US dollars. If anyone holds US dollars for a year and intends to spend that money on goods and services within the US, and the CPI showed an inflation rate of 4%, then they effectively have lost 4% of the value of their dollar holdings.It is a lagging indicator, but is one of the most important for the forex markets.

Publish date: Monthly around the 20th, for the previous month's data.

3 . Consumer Confidence Index aka CCI

CCI is published once a month and for the most part, a leading indicator. It is huge survey of roughly 5,000 American consumers that the Fed uses it to gauge where the economy is headed. Since consumer spending makes 50% of most economies, and roughly two-thirds of the American economy, it is a major indicator.

Publish date: 10:00 AM (EST); monthly, last Tuesday of the reporting month
Revisions: Only minor, not really market moving
Reporting Agency: Conference Board
Release: CCI Release

4.Gross Domestic Product aka GDP

The GDP numbers are released in three phases. It is a lagging statistic. First the advance numbers come out, then the preliminary numbers, and thirdly, the final numbers. The advance number comes out on the last day of each quarter. GDP growth rates are, for the most part, the rate that the economy has been growing.

The bigger the number, the bigger the better for the US dollar. That being said, like the jobs report, market reaction is usually based on how the numbers stack up against the predictions.

Formula:
C = private consumption
I = private investment
G = government expenditure IM = imports of goods and services

GDP = C + I + G + (EX - IM)

5.Trade Balances

The government publishes numbers concerning the trade balances with most every country. They are lagging indicators. In the classical version of currency markets, this would be the only thing that changes the value of currencies. The more a country exports, the more demand there is for its currency. The more it imports from a country, the more demand there is for that country's currency.

Notice all of these statistics are US data. Other currency zones have their own corollary data that often is quite important to individual currency pairs. However, it is almost always only the US data that affects every all of the majors.

Eight times per year the US Federal Open Market Committee or FOMC for short meets to discuss US monetary policy. Here they set the borrowing rate in an attempt to affect price levels to help maintain economic growth and keep inflation within acceptable levels.

A rise interest rates typically is seen as good for the US dollar where a drop in interest rates is typically seen as negative for the USD.

Publish date: 8 times per year at 2pm ET
Reporting Agency: Board of Governors of the Federal Reserve System
Release: FOMC Release Data