Getting a basic idea about the high impact economic news
Have you ever observed the market changing overnight because of a certain news event? Your answer might vary based on your experience as an investor. If you have just started in this profession, you might not have faced anything similar. But if you are a consistent investor then surely you have seen events like this.
Now, as many of you may know that the currency exchange market is highly volatile and the volatility is based on supply and demand. Every commodity has some utility and this utility calls for supply and demand. When the demand for a commodity increases, the producers try to supply more.
But if it is not possible to supply according to the demand, then the price of such commodity increases. The opposite happens when the demand decreases. Now many of you may question what triggers such differences between supply and demand. So, several factors work behind it. Some factors are sudden while some factors take place pre-planned.
Sudden factors may include news releases of any man-made or natural disaster, any scandalous news, any sort of disease outbreak, and many more. But the main problem with these factors is that it is not possible to get notified about them beforehand. They occur without any warning and create huge chaos in the trading platform.
However, there are some market releases that you can watch out for beforehand. Certain events take place within a specific duration and remaining alert about them before their occurrence can be much helpful to identify any sort of market changes.
Now let’s find out some of the ongoing economic events which can create intense volatility in the market. Read this carefully as it will improve your fundamental analysis skill significantly.
NFP often known as the non-firm payroll has a massive impact on the Forex market. Navigate to this website and read some fundamental posts to get a general idea about the impact of the news. If the data manages to beat the expectation, the U.S dollar gains significant strength against most of its major rivals. Thus it rallies higher with a strong momentum which can change the long-term trend.
The CPI stands for the Consumer Price Index which is the change in the price of various market commodities, especially daily life products. Now, news is released within a specific time and whenever it is released it creates a huge impact on the market. For example, if the CPI released price of any commodity becomes high than normal then there increases the demand for that product. Such demand is not healthy as many people will be deprived of buying that daily product.
Now if you have some stocks, you can sell them at a higher value which will be much profitable for you. In this way, you will be able to make some clever moves when you are analyzing events in your trade.
The government is liable to inform the mass people regarding the economic conditions of the nation. Now, this is very important to maintain transparency as well as economic progress. Among such news events, some of the most important are the GDP, the budget, the employment rate, and many more. When the GDP is released, it plays an important role in indicating whether the economy has accelerated or retarded. That helps the investors to understand if they will make a profit by investing in the products produced by that country or not.
The employment rate is a very popular indicator to understand whether the country is progressive or not. When a country has a higher percentage of employment rate, it means that the people of that country are mostly free from poverty and can invest more in development activities. That way, investing in the currency of that nation will be profiting for the investors.
Now, how do you stay notified about these events? Well, it sure can be a challenging question but there is an answer to it. If you manage to note down all these events and the time they will be released in your economic calendar, then you will be able to get notified beforehand. This will help you to prepare yourself enough before entering any trade.