KCM: Do you need to know some important economic data released for foreign exchange?

doforeign exchangeDo you need to know some important economic data released?

The most important data areGDP，PPI，CPI，RPI，UEForeign trade balance figures, etc.

1) GDP is the gross domestic product, which is the sum of the value of goods and services available for consumption throughout the year. It measures the overall capacity of a country's economy. If GDP increases by 1% over the previous year, it is equivalent to saying that the annual growth rate of the economy is 1%. But the value of goods and services in the form of prices also rises due to inflation. Therefore, economists like to use "real growth" to measure the economic growth of a country. If the nominal economic growth rate of a country is 7% and the inflation rate is 5%, then the real annual growth rate is 2%.

Normally, the higher the growth rate of a country's GDP, the more dynamic the country's economy will be, and its currency will be correspondingly strong. However, when comparing the economic growth rates of different countries, you should take into account their different economic bases. For an economy as large as the United States and Japan, a growth rate of around 3% can be considered very good. For a smaller economy like China, if the growth rate is only 3%, it cannot be considered that its economic development is in good condition.

2) PPI: Producer Price Index. It describes the price of raw materials for production, and can be used to measure the price changes of various commodities at different stages of production. Countries collect quotes for various commodities from major producers through the Bureau of Statistics, and calculate the decimal form through their own calculation methods for comparison. For example, the data released by the United States is now calculated using the 1967 index as 100. This indicator is published by the US Department of Labor once a month. You can see that if the published index is higher than expected, it means that there is a possibility of inflation. Relevant parties will study this and consider whether to implement a tight monetary policy. The country's currency will therefore appreciate, which will generate positive. If the index is worse than expected, the currency will fall.

3) CPI: This is the abbreviation of Consumer Price Index. This index reflects the changes in the prices of goods and services paid by consumers. This index is also an indicator often referred to by the Federal Reserve Board of the United States. Greenspan, chairperson of the Federal Reserve Board of the United States, uses it to measure the extent of inflation in the United States, and whether to raise interest rates or cut interest rates to control the US economy. This indicator is released once a month by the Department of Labor in the United States, and we should pay attention. When this index rises, it shows that the inflation rate in this area has risen, indicating that the purchasing power of the currency has decreased. Theoretically, it is not good for the currency, which may cause the currency to depreciate. At present, the European Central Bank puts inflation control in the top priority. Inflation benefits the currency, but if inflation is brought under control and interest rates fall at the same time, the interest rate of the currency will actually fall.

4) The RPI is the Retail Price Index. In the United States, this data is sampled by the U.S. Department of Commerce in the monthly National Business Survey. Retail goods paid for by cash or credit card are the subject of the survey, including furniture, appliances, goods sold in supermarkets and medicines, etc., excluding consumption of services. If the economy develops rapidly, personal consumption will increase. Oversupply leads to higher prices, the index will rise, which will bring about inflationary pressure later. The country's government will tighten monetary policy. As a result, interest rates tend to rise, providing favorable support to the country's currency.

5) UE is the unemployment rate. It is calculated by the country's Ministry of Labor and published monthly. Governments around the world use a sample survey of households across the country to judge the employment situation of the entire working population in the country during the month. If you are willing to work, but not employed, this number is the unemployment rate. This indicator is a very important economic indicator. Take the Eurozone as an example: when the euro was launched, the unemployment rate in the European Union was above 10%, which was higher than that in the United States, so the euro fell all the way. In early November, the unemployment rate in Japan fell from 5.5% to 5.4%, so the yen broke through the 121 mark in one fell swoop, reaching the 119 water level

6) Foreign trade balance figures: This is a measure of the trade of goods between countries, which constitutes an important part of economic activity. If a country's total imports are greater than its exports, this is a trade deficit, and vice versa, a surplus. If a country's trade deficit occurs frequently, the probability of the country's currency depreciation will be high. Because the depreciation of the currency will increase the competitiveness of the export of goods, otherwise, it is optimistic about the currency.