If you are trading the GBP/USD currency pair, referring to a forex calendar will alert you to economic developments that could have an impact on the currency and indicate conditions that could be favorable for a profitable trade. Here are five of the most significant economic events that you have to watch out for on the forex calendar since they create conditions of moderate to high volatility for the UK pound as well as for the GBP/USD currency pair.
Retail Sales: This indicator measures value and volume of sales of consumer products in categories such as food, non-food, clothing and footwear, and household goods. It is released on a monthly basis and is seen to have a high impact on the pound since consumer spending makes up 70% of economic activity in the UK. According to August figures, retail sales in the UK fell 0.4% on a month-to-month basis.
IP/Man P Index: This indicator measures the output indexes from several major production indices, including the oil, electricity, water, mining, manufacturing, gas extraction and utility supply. According to the forex calendar, it is released on a monthly basis and has a moderate to high impact on the currency, particularly due to the impact of manufacturing on the UK export sector.
Harmonized Index of Consumer Prices (HICP): The EU’s version of the Consumer Price Index, the HICP measures the changes in a given basket of goods and services designed to reflect the spending of a typical consumer living in an urban area. In the UK, however, the HICP is known as the CPI. In July, the UK CPI rose to 2.6% from 2.4% the previous month. The UK also maintains a separate inflation measure, the retail prices index (RPI) which is computed differently from the CPI and whose main difference is that it includes housing costs such as mortgage payments and council tax.
Unemployment Rates: This indicator measures the number of people in the UK who are out of work and actively seeking work. In July, the UK unemployment rate was at 8.1%, down by 0.1% from the previous quarter. The reduction was attributed to the boost in temporary employment from the London Olympics. This indicator is significant because it reflects the prospects for future economic growth as well as consumer spending. This indicator is scheduled for monthly release on the forex calendar.
Royal Institute of Chartered Surveyors (RICS) Housing Index: The RICS, which is a professional organization composed of surveyors and other property professionals, conducts a monthly survey of the UK housing market which is seen as the best predictor of housing prices. In August, the RICS balance was at -19, which meant that 19% of surveyors surveyed reported that prices were falling. This indicator is seen to have only a medium impact on the pound, however, as property prices reflect the state of the UK economy as a whole. For example, if housing prices are down, it may indicate the economy is depressed. In the forex calendar, the RICS Housing Index is scheduled for monthly release.