The Influential of Economic to Currency Trading



A good economy means a good value of money. The overall picture of the economy of a country can be deduced from its GDP because it is a reflection of economic growth. For example, in dealing with the EUR / USD, European GDP will help traders determine the growth of the European economy. Otherwise, when it comes to the USD / CHF, you should check up on the GDP of Switzerland for information on growth and productivity of the Swiss economy. Similarly, traders may also take note of the Japanese industrial production figures if they are interested in the USD / JPY.


In addition to GDP, there are other publications that provide traders with invaluable insights of each major economy. The Swiss Institute for Business Cycle Research (KOF) conducts surveys of various industries, retail and wholesale sectors and use the data to predict GDP growth for the next 8 months. Such predictions could only help traders to plan their future strategies in dealing with the Swiss franc. In Japan, the quarterly Tankan Survey is released annually and reports business relationship optimistic versus pessimistic business. When it comes to the euro, the trader can not afford to overlook, since Germany is the largest economy in Europe. Therefore, pay attention to the survey IFO business Climate Germany also provides reports and analysis on topics ranging from the exchange of detailed economic forecasts to social policies.

The four major currencies refers to the US dollar and so it is natural that a trader should not pay attention to the US .. In addition to its GDP, watch reports on the US current account States and the US trade balance. The current account deficit of the US has been on the team for some, but the deficit is not necessarily a sign of a prolonged weak economy or depreciation in the value of the dollar. By monitoring the state of the US current account, the trader shall be provided with an approximation of the US comparative advantage or disadvantage in the world economy that could influence the market. Similarly, the trade deficit does not necessarily reflect the bad economy. In fact, the trade deficit in the US It has led to a fairly strong dollar compared with other currencies. Still, by which economies depend heavily on exports like Japan, it is important that their exports exceed imports especially when China is becoming very competitive. Also for European countries, an excess of imports could only weaken the currency.

However, a good economy must also be supported by a healthy occupancy rate in the country. For the US market, the trader can safely measure market condition, referring to the US Nonfarm payrolls showing the number of workers in various industries in the US, excluding employees working with the general government, private households, nonprofit organizations and farms. The market has become sensitive to these monthly reports due to the possibility rumored a jobless recovery. Although the economy seems to be recovering, slow employment growth suggests that the fragile economy which will have its impact on the market. Meanwhile, beware of unemployment in the UK When the GBP / USD pair and German unemployment figures operating When trading EUR / USD. Again, the focus is on Germany, because being the largest economy in Europe, the unemployed can be used as a representative of the current economic situation in Europe.

On the same computer, the US TIC data allows the operator to keep track of all US securities being bought by foreign entities and also the exact amount of money to become self-supporting. Declining ICT entry may indicate that the falling value of the dollar. However, consumer spending is also an important factor to pay attention to. healthy spending is good news for the US, since then reassert the dollar. This is the same for Japan. While the Japanese economy is mainly due to its export sector, consumer spending is an important indicator of economic activity and prosperity.

Then interest rates affect the value of the currency and currency trading, the US dollar, yen, sterling and Swiss franc reportedly being major currencies funding. Due to the high leverage involved in transport business transactions, even slight changes in interest rates that affect exchange rates can cause large losses. But what may cause or banks cut interest rates?

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