The List of Economic Indicators That Highly Impact The Forex Market

Ali Qamar

Updated: 16 November 2023

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Economic indicators have a significant mark on the forex market and the price of Contract for difference (CFD). Therefore, lots of traders need to monitor the economic calendar to make sure that they are up-to-date on the volatility of the market.

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All over the globe, various governmental organizations and the non-governmental ones get daily data and report them daily with some pieces of financial information. However, how these data are put together differs considerably.

It is essential to note that most indicators will update you on the economic situation of the country. Also, leading economic indicators are usually necessary for forex traders. Hence, here is a list of the highest economic indicators that have a high impact on the forex market.

Gross Domestic Product (GDP)

Gross Domestic Product is the most important economic indicators with a high effect on the forex market. This indicator gives the best update on the current situation of an economy. The Gross Domestic Product of the U.S is usually released at the end of every last quarter of the year.

It also shows entire monetary value of goods and services in a country. As a forex trader, you need to be mindful that this economic indicator is a lagging one, as it is mainly used to note the current state of a country and it is only limited to short and medium-term trading.

Unemployment Rate

The unemployment rate also has a significant impact. It is described as the percentage of labor force that is looking for work. When a country is about to recover from a dormant state, unemployment serves as lagging indicator.

When the GDP of an economy is low, you will the rate of unemployment increasing. It is essential to know that a long period of unemployment in an economy is very detrimental to consumers’ sentiments, and it consequently affects consumer spending.

Nonfarm Payrolls Data (NFD)

NFD is a vital indicator in the forex market, and it is released on the first day of every month by the Bureau of Labor Statistics. NFD is defined as the information of the change in the total of people that were employed in the previous month – not including those people in the farming industry.

NFD is always monitored by the federal reserve, and it determines if the USD becomes or weaker.

Consumer Confidence Index

This shows the confidence of consumers on the current state of the U.S economy in regards to their spending power. If consumers are confident in how stable their income, then their purchasing power will be higher.

Durable Goods Order

Durable Goods Order usually indicates how people spend more on durable goods than perishable ones. A report on durable goods order is usually released on the 26^th of every month.

Capacity Utilization

Capacity utilization provides the report on the health of the manufacturing sector of an economy. It can also be defined as the highest level of the stable output a manufacturing company can achieve within a realistic framework. If the rate of capacity utilization of an economy is below 78 percent, then it points out to a forthcoming economic recession.

Federal Funds Rate

The interest rate decision is one of the driving factors of the forex market. It is usually measured by the Federal Open Market Committee. This data judges the overall state of the United States economy.

Retail Sales

This data collates and inform the public on the total goods sold by the retailing sector of an economy. This data is released on the 12^th of every month in the U.S.

Industrial Production

The Industrial Production data is usually released on the 16^th of every month, and it shows the total measure of the raw goods produced every month by different industrial companies.

Producer Price Index

Producer Price Index also goes together with the Consumer Price Index, and it gives more information on the inflation rate of an economy. This data is usually released monthly. It also indicates the number of wholesale goods.

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Final Words

There are more indicators to the list, but you need to know that the ones listed here have a high degree of impact on the forex market. Nevertheless, forex traders need also to need to know that expecting inflation may also influence monetary policies, and even the steps Central Banks follow may also be vital indicator.

The List of Economic Indicators That Highly Impact The Forex Market

Ali Qamar

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