Traders who use the news strategy in trading take into account the huge impact of financial and macroeconomic indicators on world trading platforms. The Forex market is also dependent on economic and political factors. Trading on news requires the trader to understand the events.
How news influence Forex trading
According to the Avatrade customer review, macroeconomic data and reports are the most important economic indicators of various countries, helping investors and analysts build forecasts for the development of market situations. Macrostatistics allows you to detail important aspects of the economic situation of any country and region. The most significant indicators include:
- Information on the level of employment of the population
- Production volumes
- Gross domestic product (GDP)
Macroeconomic data and reports are one of the main instruments of fundamental analysis and are an indicator of the strength of the state currency. A stronger economy strengthens the national currency.
Geopolitical events are also important in trading since, for any investor, political risks are a real threat of a sharp reduction in profits and the occurrence of large losses due to the policy of the state where the business is located.
One of the most powerful levers of managing the economy is the monetary policy pursued by the country’s Central Bank, affecting the state of credit and money circulation. Credit-money relations, in addition to influencing economic events occurring within the state, affect its trade and payment balance. For the Forex market, the monetary policy of countries is fundamental.