Financial markets are highly volatile, offer great opportunities for profit, and the foreign exchange market is no different.
Forrex is one of the world’s most active assets, with a market cap of $ 6.6 trillion in 2019 alone.
When you hear this, you may be wondering – what is forex trading and how does it work? It is the process of buying and selling foreign currencies in the financial market. Currencies are traded in pairs, known as currency pairs. This allows them to compare with each other to determine their value.
There are many factors that can affect the value of a currency and therefore affect your position in the forex market. Since the health of a country’s economy is a major factor in the exchange rate, events and information about a country’s financial security over a year can dramatically change the face of the financial market.
Fortunately, many of these events are up-to-date and planned in the economic calendar, which will help you plan ahead to better minimize the impact of each event.
In this article we will give you some examples of the types of events that affect the Fox Market in the Economic Calendar, so keep reading to find out more.
Some events in the economic calendar are political, as changes in government and policy affect the value of the currency.
One of these political events is election. Their unpredictability generally leads to mass instability, which can affect the volatility of the forex market, especially if volatility is debated or delayed.
In the weeks leading up to the election, the market may make short-term changes. However, you can plan ahead and use basic analytics using an economic calendar to maximize your chances of getting out of this predicament.
One of the most important indicators of the country’s economic health is employment. This information is published monthly in the economic calendar. A country’s employment data shows how many individuals are employed and thus a stable source of income.
The higher the unemployment rate, the lower the capital expenditure of individuals, which means that the cost of living should be reduced, weakening the economy.
One of the most significant hiring rates is the US dollar off-farm payroll, as the US dollar acts as the base currency in the forex market. This data release covers 80% of the country’s workforce, so it is important to plan your activities around the forex market, especially if you are trading in US dollar pairs.
Gross domestic product (GDP)
Each year, each country publishes an overview of its gross domestic product (GDP). This is the common value of a country’s goods and services, and it is a major economic indicator.
GDP tells you the price of a country’s goods, as well as how much the country has spent on goods and services, giving you an idea of their economic activity.
No matter what your approach or strategy to the forex market, you can benefit greatly from using an economic calendar. It notifies you of all events that may be affecting your space, giving you time to plan ahead for further variability. In addition, you can use online risk management tools to minimize potential losses in the marketplace.