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If you have only just come into the foreign exchange market and do not yet know where to find information about the forex market among the countless sources there are today, this article will show you the sources worth following.
There is far too much information and news around the forex market
There is so much information to work through these days that it easily leaves a beginner confused, which is to say information overload. And yet understanding the information that matters is exactly what trading requires.
Currency prices swing because of many kinds of information: economic reports, interest rate changes, or a new central bank governor. News changes the fundamentals, and the fundamentals change the prices of the currency pairs of the countries involved.
When you set yourself the goal of making successful trades, it becomes far easier if you know why the price is moving the way it is moving now. Successful traders were not born successful; they were taught or they learned, and they had to go through hard practice to get there. They were not successful traders from the very start, they have no mystical power, and they cannot see the future. What they do is follow the data and the information about the forex market, pick out which information really matters, and then make planned decisions and manage risk.
Financial and foreign exchange news websites
In the information age, market data is usually available from a range of sources, the internet above all; the internet is the most convenient of them because it updates very fast and you can reach it from almost anywhere. There are a great many websites devoted to foreign exchange, most of them free, while a few in-depth data services charge a fee.
There are countless financial news sites today, and we suggest you turn to the large, reputable ones, such as Forex Factory, Reuters, Bloomberg, The Wall Street Journal, MarketWatch, Investing.com and FXStreet…
These sites update market information almost instantly, including central bank announcements, economic reports, and the analysis and commentary of specialists. For the most important events you should also read straight from the official source, such as the websites of the US Federal Reserve (federalreserve.gov), the European Central Bank (ecb.europa.eu) or the US Bureau of Labor Statistics (bls.gov, which publishes Non-Farm Payrolls and the CPI), so that nothing is misunderstood through a summarized report.
Television channels and the news feed inside your broker’s platform
The large financial television channels are also a fast source of news, with plenty of interviews and in-depth commentary. Financial information is broadcast almost continuously, which lets you follow what is happening in world markets. The well-known channels are Bloomberg TV, CNBC and others (note that the electronic news agencies and the data on a trading platform are usually faster still than television).
Alongside that, another way to get forex information immediately comes from the forex trading platforms. Many forex brokerages build an online feed into their software, which gives you easy and immediate access to market events and news; these feeds are in English, though, so you need to be able to read English.
Forex news from the economic calendar
If you are already a trader, it is a real gap in your day not to look at the economic calendar. How good would it be to look at this month’s calendar and know when the Fed will announce a change in interest rates, what rate is forecast, what the rate actually turns out to be, and what effect the change has on the foreign exchange market? All of that is set out in the economic calendar.
Economic events and reports usually come so often that most people cannot keep up with them. This data can move the market in the short term and speed up the swings in the currency pairs you are watching, which is very risky for your account.
Luckily for you, though, the economic releases that matter to forex traders are usually scheduled a few months in advance.
Here are some of the releases worth attention, because their effect is very strong:
- Nonfarm: We know the schedule for the US Non-Farm Payrolls release in advance (usually 8:30 in the morning New York time on the first Friday of the month, that is 12:30 or 13:30 UTC), but we have absolutely no way of knowing whether the figure will come out good or bad.
Non-Farm Payrolls is the figure for the number of new jobs in the US economy in the previous month, not counting agriculture. It has a strong effect on the US dollar: if the figure is better than the forecast, the dollar usually rises; if it is worse, the dollar usually falls, although the real reaction also depends on what the market expected and on the figures that come with it (the unemployment rate, wages). Gold and the currency pairs then move along with it. The release usually comes on the first Friday of the month, but there are times when the schedule changes. It is one of the most important economic releases for the US dollar.
+ The US consumer price index (CPI): it measures inflation and has a direct effect on expectations for the Fed’s interest rates, so it too makes the market move very sharply.
+ The FOMC statement and minutes: the FOMC (Federal Open Market Committee) is part of the US Federal Reserve (the Fed) and meets 8 times a year to decide interest rates. The policy statement (the FOMC Statement) is published right after the meeting, at 14:00 New York time (18:00 or 19:00 UTC), and 30 minutes later the Fed Chair holds a press conference; the detailed minutes (the FOMC Minutes) are published about 3 weeks later. Depending on the wording of these documents, the market can move very sharply and in ways that are hard to predict.
+ Interest rate decisions by other central banks, such as the ECB (Europe), the BoE (United Kingdom) and the BoJ (Japan)… Interest rates affect how attractive a currency is, so when rates change (or change differently from what was expected), the exchange rates of the pairs involved can move very sharply.
All of the releases above matter a great deal to a trader, and you can follow the economic calendar on reputable sites such as ForexFactory.com, Investing.com and FXStreet.com… See also: What to watch out for when you trade forex on the news.
