Understanding the most important news in the Forex market

Understanding the most important news in the Forex market

The Forex market is enormous and it’s quite normal for traders to hear different sorts of news about the market. Although not all the news you hear about the market is true, some of the news is true. So, you need to be aware of the news you hear and try to work out what is true. Without keeping yourself updated, you can’t trade like a pro-UK trader. Think about the Brexit news. Those who didn’t know about Brexit have lost a huge amount of money. On the other hand, the skilled news traders made a big profit.

In the economic calendar, you will find the news. Only focus on the news that impacts higher on the market, you can easily ignore the rest. News plays an important role in the market as by observing the news, you can identify the direction the market will move in.

Consumer price index (CPI)

If you can understand and observe the news of the market, you can surely identify how the consumer price index measures. By measuring the consumer price index you can find out the rate of the economy compared to a base year. You may find difficulties to understand the consumer price index but there is nothing to worry about, give it time and learn by observing. Never think the CPI is going to change the trend. It’s more like medium impact news. However, it gives critical information about the future price movement and acts as a leading indicator.

Many central banks use 2.0% to limit the inflation rate and to measure it they use the consumer price index. To make profitable trades in the market you should understand the consumer price index with time. The consumer price index acts as bullish news for the currency of the market.

Overnight interest rate

The banks also borrow money from each other and that happens on an overnight basis. The overnight interest rate is known as its monetary policy arsenal. The overnight interest rate also affects the swaps rate in the market. Interest rate decision can change the trend. Those who are using the Saxo CFD trading account can use the robust platform to keep themselves updated about such news. Prior to the interest rate decision, you have to scale your trade. Unless you are pro at fundamental analysis, you should not participate in such volatile market conditions. Learn more about the interest decision to understand how it impacts the performance of a certain economy.

Many traders assume that the fundamental analysis helps to predict the future interest rates of central banks. The overnight interest rate also affects a bullish movement. In the beginning, you will find the overnight interest rate very difficult to understand so, make sure you learn it by giving enough time.

Retail sales

Retail sales are issued on a monthly basis and in the market, it is considered as a leading macroeconomic indicator. Retail sales act as a good indicator to increase the growth rate of future GDP. The GDP is the main indicator of a currency’s strength and it is very important in the market.

Although retail sales are very tricky to analyze, it depends on the productivity level of the economy. You need to pay attention to it as it’s not an easy term to understand, make sure you learn about it before analyzing retail sales data.


There are also many other important economic indicators, some are mentioned above to help you to understand the news properly. To make profit in the Forex market, don’t forget to learn about all the other economic indicators. Some of them are the Capacity Utilization rate, Housing Stats, Purchasing Managers Index and many more. The economic news helps the traders to act more swiftly when they place any trades in the market to make profit.


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