How will the presidential elections affect FOREX

What Events Are Affecting Forex Trading?

There are a wide variety of factors that can affect the price of a particular currency pair, and it is impossible to account for every possible variable. However, there are certain key events that virtually all forex traders need to be aware of as these events can have an impact on the entire economy. Here are some of the major events that can affect Forex pair prices. .

Illustrative prices.

Elections and Political Events

Elections can have a significant impact on a country's currency. Some parties could be seen as more conservative and fiscally responsible, while others are seen as more social and spending-friendly. In general, elections can be associated with increased market volatility.

Macroeconomic data

Macroeconomic data is the most important piece of information for making Forex trading decisions. These data best reflect the state of an economy, which has a direct impact on currency valuation. You can find this data in the economic calendar. Popular macroeconomic factors are:

  • Interest rates - The interest rate of one country in relation to another is one of the most important criteria in determining an exchange rate. A higher interest rate often leads to an appreciation of the currency.
  • Inflation rates - Two of the most commonly observed indicators of inflation rate are the consumer price index (CPI), a weighted average of the prices of a basket of consumer goods, and the producer price index (PPI), an average of changes in prices received from domestic producers for their production. Low inflation can force central banks to cut interest rates in the country, which ultimately leads to a weaker currency.
  • Employment rates - News about the employment rate of a particular country is often also an indicator of the respective economic strength. A higher employment rate often means a stronger currency. In the US, Non-Farm Payrolls (NFP) - the country's official employment data - are published every first Friday of the month.
  • Sentiment polls - Sentiment polls are a rough measure of market expectations. For example, consumer sentiment is a closely watched indicator of future retail sales. Most advanced countries also publish Purchasing Managers' Indices (PMIs) on a regular basis. The PMI provides information about the amount of business expenses that can be expected in the future.
  • Gross domestic product (GDP) - GDP is the overall growth of a country's economy and is usually tracked by forex traders. Housing market reports, employment figures, and inflation rates all play an important role in determining a country's GDP.

How to identify events in the Plus500 economic calendar

You can identify and plan macroeconomic events using Plus500's economic calendar, accessible both on the website and through the platform. The calendar summarizes important economic events and identifies the currencies and / or other financial instruments that would be most likely to be affected.

Look for events that may affect the currency pairs you are trading. Carefully identify important economic dates and keep track of their progress. Our CFD trading platform offers plenty of resources, an easy-to-use interface and a range of sophisticated trading tools and forex indicators.

Please note that all information contained in this post and on the Plus500 website or platform is of a general nature and does not take your personal circumstances into account.