One of the great advantages of trading currencies is that the forex market is open 24 hours a day, five days a week (from Sunday, 5 p.m. until Friday, 4 p.m. ET). Since markets move because of news, economic data is often the most important catalyst for short-term movements. This is particularly true in the currency market, which responds not only to U.S. economic numbers, but also to news from around the world. Here, we look at which economic numbers are released and when, which data is most relevant to forex traders, and how traders can act on this market-moving information.
KEY TAKEAWAYS
- Economic data tends to be one of the most important catalysts for short-term movements in the forex market.
- Since the dollar is one side of many currency pairs, U.S. economic releases tend to have the most pronounced impact.
- 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 move, but with less volatility than trading the currency pair itself.