How do you analyze Forex news?

Forex news can be about: Economic indicators, monetary policy decisions, comments from financial leaders, elections, interventions, referendums, wars, etc. All of these can have an effect on whether the dollar is strong or weak.

Economic indicators measure the strength or weakness of the economy. The actual figures will be compared with previous figures to see if there is an increase or decrease in the figures before the news release. Economists will make their own forecasts based on their research and statistics, and will try to predict these figures. When the forecast figure is compared with the previous figure, the market can either get the rumor or sell the fact later. If the actual figure is better than expected, buying pressures will immediately strengthen the market. If the release figure is worse than expected, there will be less buying pressures or gains in the market.

Monetary policy meetings are decisions made either by raising or lowering interest rates or by keeping them neutral. Each country will have its own policy decision based on its economy. The country will be under either market inflation or deflation. Raising rates during an inflation period (Falcon) is a negative feeling to slow costs. In this case, the market can anticipate these comments and buy rumors and then sell the fact.

Comments from central bankers or financial leaders can be either neutral or positive. It can also be a leading indicator for interest rate decisions. If their comments appear and are commented negatively, you can see a brief coverage or cancellation.

Presidential or prime ministerial elections can lead parties to believe that the dollar is strong or weak. Countries can be exporters, commodities or surpluses, and this will dictate a weaker or stronger currency.

Interventions are usually used to strengthen or weaken the currency. For example, Japan is an exporter and prefers a weaker currency, which is good for making their exports more competitive.

Referendums are a nationwide vote. Some countries will vote on key government issues that could be a leading indicator by buying rumors and selling facts.

Wars will depend on who will be a safe haven. Normally, the US dollar is the safest currency to enter. In the past, the USD / CHF has been a safe haven because they are a neutral country.

Finally, waiting for the news and understanding why you want to buy or sell against the dollar will give you an advantage in long-term trading. Forex market news can be a news trading strategy.

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