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Domestic Fundamentals Impact the Forex Market
thesergant
Even in the world of Forex trading, things like U.S. based fundamental indicators can have a big influence upon prices. Take today’s release of the non-farm payroll report, the major government release that documents employment and how much money is being made. The joblessness rate is going down, which is definitely a good thing because... Read more
Even in the world of Forex trading, things like U.S. based fundamental indicators can have a big influence upon prices. Take today’s release of the non-farm payroll report, the major government release that documents employment and how much money is being made. The joblessness rate is going down, which is definitely a good thing because it means that there are more people in the workforce, but there is a disturbing little number that might not make headlines. Still, it is an important number and it will affect currency trading eventually. The average hourly wage number has gone down by 0.1 percent over the last month. So, even though there are more jobs, overall, people are making less money. This means a little less money being put back into the economy, and has the potential to be troublesome into the future. What does this mean for currencies? Well, look at the USD/JPY pair to get a clear picture.-more--> Today, the U.S. dollar had already fallen by more than 0.5 percent before noon EST. That’s a huge number for two of the world’s most stable currencies, and is a clear indicator that some sort of unrest is in the works. This is especially true because of the past behavior that these currencies have shown. Since November, the dollar has been rising steadily against the yen, going up over 7 full points. For such a big portion of that to be erased in a single day indicates more than just a kneejerk reaction. It points to the fact that consumer confidence is shaken. The bothersome news within the non-farm payroll report is one contributing factor here. The U.S. economy is in a weird place right now. Companies and major stock indices are doing better than ever, but the people that work for them are still struggling. This payroll report alludes to this problem, and now it is starting to leak over into the Forex world, where problems like this end up impacting everyone in the country as the dollar loses value on the worldwide stage. This will eventually come back to cause problems within the stock market, too, although that may take several months before it happens. Now consider the fact that some Forex experts expected the dollar to go up today even after the report. Some believed that it could go up as high as 104.80. Instead, it has dropped significantly, going from just under 104 to just above 103. It is a clear case of the news not going as it was expected, and having disastrous results, especially if you were prepared in the market before this was released. This, unfortunately, is something that happens occasionally when you are attempting to predict the news before it is actually out. Jumping onto a trade after the fact is not always super lucrative, but it is a lot safer and when you combine a lot of small victories, they add up to a lot over a period of time. Trading the news is a great method of making money for some, but you need to make sure that you have a clear handle on what the news is going to be before you act. An addendum to this, is that you need to know how that news is going to affect prices. Acting after the fact can be prosperous if you can guarantee yourself a good rate, and nowhere is this more realistic than in the binary options market. Taking small positions a little bit at a time can give you results equal to or better than if you had acted before the fact within the Forex market. Currency pairs are the most popular aspect of binaries, and these are a very good tool to use if you like trading Forex pairs, but don’t want the uncertainty. ***Your capital may be at risk. This material is not investment advice.***
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Domestic Fundamentals Impact the Forex Market

Even in the world of Forex trading, things like U.S. based fundamental indicators can have a big influence upon prices. Take today’s release of the non-farm payroll report, the major government release that documents employment and how much money is being made. The joblessness rate is going down, which is definitely a good thing because it means that there are more people in the workforce, but there is a disturbing little number that might not make headlines. Still, it is an important number and it will affect currency trading eventually. The average hourly wage number has gone down by 0.1 percent over the last month. So, even though there are more jobs, overall, people are making less money. This means a little less money being put back into the economy, and has the potential to be troublesome into the future.

What does this mean for currencies? Well, look at the USD/JPY pair to get a clear picture.-more–> Today, the U.S. dollar had already fallen by more than 0.5 percent before noon EST. That’s a huge number for two of the world’s most stable currencies, and is a clear indicator that some sort of unrest is in the works. This is especially true because of the past behavior that these currencies have shown. Since November, the dollar has been rising steadily against the yen, going up over 7 full points. For such a big portion of that to be erased in a single day indicates more than just a kneejerk reaction. It points to the fact that consumer confidence is shaken. The bothersome news within the non-farm payroll report is one contributing factor here.

The U.S. economy is in a weird place right now. Companies and major stock indices are doing better than ever, but the people that work for them are still struggling. This payroll report alludes to this problem, and now it is starting to leak over into the Forex world, where problems like this end up impacting everyone in the country as the dollar loses value on the worldwide stage. This will eventually come back to cause problems within the stock market, too, although that may take several months before it happens.

Now consider the fact that some Forex experts expected the dollar to go up today even after the report. Some believed that it could go up as high as 104.80. Instead, it has dropped significantly, going from just under 104 to just above 103. It is a clear case of the news not going as it was expected, and having disastrous results, especially if you were prepared in the market before this was released. This, unfortunately, is something that happens occasionally when you are attempting to predict the news before it is actually out. Jumping onto a trade after the fact is not always super lucrative, but it is a lot safer and when you combine a lot of small victories, they add up to a lot over a period of time. Trading the news is a great method of making money for some, but you need to make sure that you have a clear handle on what the news is going to be before you act. An addendum to this, is that you need to know how that news is going to affect prices.

Acting after the fact can be prosperous if you can guarantee yourself a good rate, and nowhere is this more realistic than in the binary options market. Taking small positions a little bit at a time can give you results equal to or better than if you had acted before the fact within the Forex market. Currency pairs are the most popular aspect of binaries, and these are a very good tool to use if you like trading Forex pairs, but don’t want the uncertainty.

***Your capital may be at risk. This material is not investment advice.***

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