Reasons Traders Should Pay Attention to The Economic Calendar

The Economic Calendar usually displays a table per certain date that contains several chronological events on a daily basis. According to Investopedia, investors and traders use the economic calendar to plan trades and portfolio reallocations.

Usually, in the economic calendar there are following three information:

• Forecast (a projected number of market participants)

• Previous (the number of results from the news in the previous period)

• Actual (a number that shows if the figure is better than Forecast then it will have a positive impact on the countrys currencies)

For a country currency that has a high or good impact, it can affect the market price. It is also important to determine the position.

Lots of information contained in the Economic Calendar. However, in the forex market, traders are more focused on the following three data:

Interest rate

Activities in the forex market are closely related to interest rates because they can determine the flow of global capital into and out of a country. The higher the interest rate, the more attractive the currency will be. Vice versa.

Inflation

The central bank as the guardian and supervisor of inflation tends to raise the countrys benchmark interest rate. One reason is to attract many interested people in the lending sector so that credit automatically decreases.

Non-Farm Payrolls (NFP)

One of the most important agendas awaited by traders on the economic calendar is the NFP report

issued by the central bank of the United States (US). NFP is an indicator of the economy in the US as well as being the strongest factor in influencing the determination of US central bank interest rates. NFP comes out every Friday the first week of every month.