Forex Trading- 5 Economic Indicators A Person Need To Follow
http://bit.ly/zeBeyb
Regulators and many governmental agencies release important data revealing the state of the economy. Currencies move citing these data releases as deciding factor. As a beginner you should know at least following economic indicators. They are capable of bringing huge moves within few minutes. It is best to know the dates of their announcement. The Unemployment Data One of the important economic indicators you should keep your eyes on is non form payroll popularly known as NFP. This data comes out of America on first Friday of every month. It gives the number of jobs added or lost during the last month. It indicates how the US economy is doing. An increase in the jobs indicates the healthy state of US economy and more and more consumers increase their spending. It is a propellant of growth. Strong data is good for US dollar. An Indicator of Inflation Consumer price index is also one of the closely watched economic indicators. It reports the change in value of goods and services and hence a good indicator of inflation. Rising CPI means the inflation is high and savings are reducing. In response to this inflation, central banks increase the interest rates. Decreasing CPI means deflation which can force central bankers to reduce the interest rates. CPI is one of the indicators of future interest rate policy of central bank. It is considered important by everyone in the currency market. A stronger CPI than expected increases the value of the currency and opposite happens if CPI disappoints the expectation. CPI for last month is released around 20th of next month. The Output of Economy Gross domestic product is one of the important economic indicators to gauge the strength of the currency. GDP is the value of goods and services produced in the country. It is very important figure as it is cited by policymakers to decide the policy. Hence it is an important indicator. A good GDP number implies increased production and more revenue. It strengthens the currency of the country. GDP data is released quarterly on the last Friday. The Demand for Currency Of the economic indicators tracked, trade balance report is a vital data watched by traders around the world. The currency derives its price depending on the demand and supply. The trades of that country with others determine the demand of the currency of that particular currency. If the goods produced by that country are popular in other countries then it strengths the currency. Trade balance report reveals the net of export and import. If the data is positive then it is good for the currency. A negative data means currency is losing its value. US release the trade balance report every month. The Strength of Manufacturing Sector Purchasing managers index is one of the economic indicators which is of immense importance. It indicates how the manufacturing sector is doing. PMI gets its value from five different indexes namely new orders, inventory, production, supplies and employment environment. It is announced on the first business day of every month. PMI above 50 indicates the expanding economy and appreciates the value of the currency. On the other hand, a reading below 50 indicates the contraction and depreciation of the value of the currency. Economic indicators are judiciously followed by everyone in the financial community. They move the markets considerably and hence provide excellent trading opportunities. They are very easy to understand and follow. You can use the big moves during data release for making big profits in less time.