Unlike other trading markets, the foreign exchange market is open 24 hours a day from Sunday, 5 PM EST up to Friday, 4 PM EST. Most of the time, traders see this more as an advantage than a disadvantage. However, forex news makes it both flexible and vulnerable to sudden changes as dictated by the influx of pieces of information that are more or less related to the markets in particular, and to the economy in general.
Simply put, economic data that is presented in the news becomes essential mechanism for short term movements in local and international markets. Since all the markets are interwoven and interconnected, the currency market is basically affected by every single forex news report that comes out. But, the currency market is especially sensitive to the economic news that originates from the United States simply because of the fact that all currencies are dependent on the value of the US dollar. In general, there exists at least seven data pieces that are released and publicized on a daily basis. They can be used in affecting the major currencies and economies. Therefore, if you are following the news, then you have more advantage because you probably know where the best opportunities are.
Most beginning foreign exchange traders and even those who have already spent a significant amount of their time trading might be asking: Which forex news should you be focusing on in order to succeed? The answer is simple – if it is possible, one should look into every single currency. But since that is not possible, one should look into the eight major currencies around the world. These currencies dictate the overall movement in the economy. Getting constant updates and news about the following currencies (listed in no particular order) will be more than enough: US dollar (USD), New Zealand dollar (NZD), Euro (EUR), Australian dollar (AUD), British pound (GBP), Canadian dollar (CAD), Japanese yen (JPY), and Swiss franc (CHF).
Any forex trader would be familiar with the currency pairs. Looking into the major currencies that make it to the forex news most of the time, it is also essential to become familiar with the liquid derivatives: EUR/USD, USD/JPY, AUD/USD, GBP/JPY, EUR/CHF, and CHF/JPY. Knowing more about these currency pairs will help you in easily trading with different currencies throughout the globe. In addition, when you are screening economic news updates, it will be much easier now. However, in terms of impact, one should take note that most of the time, the USD plays a big part in currency strength and commodity prices. Therefore, any aspiring trader should make it a point to always tune in to US economic press releases.
Trading through forex news is a bit more complicated than what most people think. Throughout the day, consensus reporting should be noted from time to time, plus the fact that the numbers constantly change and revisions are usually done. On top of all these factors, a person who is trading through forex news should also know which among the releases is the most important and reliable.