Forex Fundamental Data is the Biggest Mover of Currency Prices
Professional traders place great value in Forex fundamental indicators... more than twice that of technical indicators. If you aren't using them as part of your Forex strategy, you are at a disadvantage.
GDP or Gross Domestic Product is considered the broadest measure of a country's economy. Since this is a lagging indicator, more focus is placed on the advance and preliminary reports. Often revisions to these estimated reports will cause increased volatility.
Retail sales is a measure of consumer spending activity and help show the direction of an economy. As with GDP, revisions to advanced reports can also spark volatility.
Industrial production (IP) is an indicator of business health. Production figures compared with available capacity are widely followed.
CPI or consumer price index, is the measure of consumer goods price changes across different categories. This is a gage which provides insight into inflation tendencies.
Changes in these economic indicators directly affect the price of a country's currency
The chart below shows the ranking of the major US Forex fundamental data price drivers:
Unemployment (Non Farm Payrolls
Interest Rates (FOMC Rate Decisions)
Trade Balance
Inflation (CPI)
Retail Sales
GDP
Current Account
Durable Goods
Trade Balance
TIC Data (Foreign purchases of US Treasuries)
Use this fundamental data as a big part of your Forex strategy. These are the "real drivers" of currency prices. Most trading platforms incorporate a calendar of pending data releases. Use caution when trading during these releases... big things often happen then!
