Global economic news is released publicly, often on scheduled dates, so that everyone can have access to the same news at the same time. Most FX brokers provide a calendar of these economic releases Click Here to see an example. Because these news releases have the potential to move currency prices dramtically, you should look at an economic calendar before you trade and note the times of the day's releases, if any.FX Rates and Interest Rates
The foreign exchange market exists to enable the currency of one country to be exchanged for another and the price of that exchange depends on the demand for one currency over another. A country’s economic health is directly measured by these economic reports: Surpluses and deficits in the trade of goods and services reflect the competitiveness of a nation's economy, as does employment levels, productivity and inflation. Interest rates and the strength of the economy are two primary factors that influence demand for a currency. The scheduled economic releases help traders gauge a country’s economic health and its likely impact on interest rates. Generally, a healthy and robust economy will see demand for its currency. This demand translates into higher prices versus other weaker currencies.
Trading News Releases
Typically, you will see currency prices spike on the announcment of such news: the more the newly releaased data exceeds the expected value, the greater the move in currency prices. Many traders try to trade around news releases to capture these price spikes. This is a specialist strategy and requires the ability to place certain types of order and preferably have access to more than one broker or market maker. I don't like this trade as it is largely a 50/50 bet - after all, what do you know about the upcoming release that no-one else knows? Your only edge is in the placing of orders and their execution. Perhaps this is a strategy you may want to visit in the future.
