What influences the movement of the foreign exchange market?

In general, a country's currency is closely related to its economy and is influenced by a range of driving indicators. Forex traders usually focus on upcoming economic indicators for the country in which they are interested. Since the US dollar is used for major currency pairings, economic indicators in the United States are considered very noteworthy.

These economic indicators and data will have an immediate direct impact on the market before or after their release. A single real data release may not cause a market reaction, but the average investor checks to see if the announcement meets expectations. This expectation can eventually curb trading volumes or lead to a short-term rally. Either way, a trader should understand that preparation and anticipation of news affect prices as much as the actual market reaction to the news.

For example, in the last days of July 2014, Anthony Wu's market report mentionedforeign exchange marketQuite calmly, many traders were waiting for news on U.S. GDP, non-farm payrolls, and the Federal Market Committee's upcoming release at the end of the week. However, the news came a day after the Consumer Confidence Index reported a result of 90.9 - much higher than the 85.5 expected. Some U.S. economic data returned to pre-global financial crisis levels, helping the dollar stay strong against other major currencies.

As you can see, you need to monitor these market news and indicators, and using a financial calendar is a very smart choice. You can bookmark a financial calendar like ours and monitor it on Forex News, as well as view your MT4 platform and trading end points through the trading time table.

We have selected your top analyst choices, and here are the metrics you need to keep an eye on.

interest rate

Interest rates are the most important driver of the market and will help central banks control the economy.

• Interest rate decision

Housing start-up rate (greatly affected by interest rates)

economic growth

These usually have a direct impact on markets and are important overall indicators of a country's economic health.

• Gross Domestic Product

• Trade balance

• Retail sales data

employment

It is important to understand a country's economic growth. Conversely, if a country has high unemployment, it will put pressure on the country's economic future. Please pay attention to:

• Non-farm employment data

• Unemployment rates and claims

• Employment changes

inflation

Pay attention to inflation announcements and central bank targets, as well as:

Consumer Price Index (CPI)

Manufacturing Price Index (PPI)

Macro and micro economic events and political stability

Political events such as elections, wars, embargoes, and other similar events will indeed affect a country's currency. In turn, in time during a period of stabilization, a country will be evaluated based on its overall economic and political stability. The direction of commodities and safe haven products is an important indicator of its stability. In addition, in addition to keeping up with world news, foreign exchange traders need to be prepared to pay attention to the policy statements and decisions of each country's central bank.