With at least eight major currencies available for trading at most currency brokers and more than 17 derivatives of them, there is always some piece of economic data slated for release that traders can use to inform the positions they take. Generally, no fewer than seven pieces of data are released daily from the eight major currencies or countries that are most closely followed. So for those who choose to trade news, there are plenty of opportunities. Here, we look at which economic news releases are released when, which are most relevant to forex (FX) traders and how traders can act on this market-moving data.

Which Currencies Should Be Your Focus?

These are the eight major currencies:

1. U.S. dollar (USD)
2. Euro (EUR)
3. British pound (GBP)
4. Japanese yen (JPY)
5. Swiss franc (CHF)
6. Canadian dollar (CAD)
7. Australian dollar (AUD)
8. New Zealand dollar (NZD)

 

And here is just a sample of some of the more liquid derivatives based on the currencies above:

 

1. EUR/USD
2. USD/JPY
3. AUD/USD
4. GBP/JPY
5. EUR/CHF
6. CHF/JPY

 

KEY TAKEAWAYS

  • Economic data tends to be one of the most important catalysts for short-term movements in the forex market.
  • U.S. economic releases tend to have the most pronounced impact on the forex market.
  • The most common way to trade forex on news is to look for a period of consolidation ahead of a big number and trade the breakout on the back of the number. 
  • A variety of exotic options are available for traders who want to capture a breakout in volatility without having to face the risk of a reversal.

As you can see from these lists, the currencies that we can easily trade span the globe. This means that you can handpick the currencies and economic releases to which you pay particular attention. But, as a general rule, since the U.S. dollar is on the “other side” of 90% of all currency trades, U.S. economic releases tend to have the most pronounced impact on the market.

Trading news is harder than it may sound. Not only is the reported consensus figure important, but so are the whisper numbers (unofficial and unpublished forecasts) and the revisions. Also, some releases are more important than others; this can be measured in terms of both the significance of the country releasing the data and the importance of the release in relation to the other pieces of data being released at the same time.