How does economic news affect the trading market?
1. Changes in interest rates
One of the most important news that affects the movements of the trading market is the changes in interest rates set by central banks. When a central bank such as the US Federal Reserve or the European Central Bank raises or lowers interest rates, the value of the currency in question changes accordingly. Raising interest rates usually increases the value of the currency, making it more attractive to invest in, and vice versa when they are lowered.
2. Employment reports
Employment reports, such as the US Non-Farm Payrolls (NFP) report, are economic events that have a clear impact on the trading market when the report indicates a significant increase in the number of jobs
3. Inflation rates
Inflation is one of the important economic indicators monitored by financial markets. When a country experiences high inflation rates, this may be an indication of the need to raise interest rates, which contributes to strengthening the local currency.
4. Official statements by central banks
Any official speech or statement issued by a central bank governor or a member of the Monetary Policy Committee can have an immediate impact on currencies. Statements that reflect future monetary policy trends, such as expectations of raising interest rates or continuing fiscal stimulus programs
