Why Investing News Is Important for Traders
The nature of forex trading is such that it is international in nature. The main eight currencies available for trading with most brokers are the U.S. Dollar(USD), Euro(EUR), British Pound(GBP), Japanese Yen(YEN), Swiss franc(CHF), Australian dollar(AUD), Canadian Dollar(CAD) and others. Since all of these currencies correspond with a particular country and its economy.
As a trader, you should pay particular attention to the economic news releases coming out of those countries. In addition to this, since the USD is on the other side of the majority of trades executed in this market, U.S. economic releases tend to have the most importance. This is why it is always important for forex traders to be on top of investing news when they are trading.
What is the key news you have to look out for?
When trading using news sources, you first have to know where and when to look. Some of them include the following: Interest rate decisions, Retail sales, Inflation (consumer price or producer price), Industrial Production, Business sentiment surveys, Consumer confidence surveys, Trade balance and Manufacturing sector surveys.
Now we will take a look at the particular type of news that affects some of the most popular currency pairs.
- USD/CAD: Since the Canadian economy is strongly linked to the US, good economic releases for the US also benefit the Canadian dollar. This pair has a strong correlation with oil prices. When they rise, this is usually beneficial for the Canadian Dollar
- AUD/USD: AUD/USD reacts consistently to news from the Australian economy. A peculiarity is that this currency is strongly correlated with gold, as Australia is an important global producer of this metal. So being, the currency tends to strengthen when the gold price rises.
- GBP/USD: This pair also reacts to US news releases, as it tends to be “faster” than the “Euro” on adapting to the new fair price. However, this is due to smaller liquidity and can often lead to erratic movements. It reacts also consistently to news from the United Kingdom.
- USD/JPY: The Japanese economy also has particular features that affect the behaviour of the Yen: The country’s trade balance presents a large surplus causing a continuous strengthening pressure of the currency.
- EUR/USD: This pair reacts much less to scheduled macroeconomic news from the Euro Zone because these are more difficult to interpret as they come from different countries.
- USD/CHF: Also called the “Swissy” it is mostly known for its role as a haven during global uncertainty, which causes the currency to strengthen in those periods. The Swiss economy is strongly linked to the European one and is quite stable. Therefore, scheduled news from Switzerland has little impact on this pair.
Some of the Top News Apps for Traders
Thus, news and reaction time can make a difference between the success and failure of a trader. TO effectively trade using investing news, you need to have a responsive news app that can keep you updated at all times. Here are some of the most popular apps.
- The StreetApp: The Street App provides updated market news along with commentaries and opinions, technical analysis and others. You also get detailed quotes and analysis of stocks.
- Bloomberg News App: The Bloomberg news app has won several accolades for being one of the best news apps. With a platform that delivers global business and financial news, it also helps you by providing proprietary portfolio tools. They provide an app that is compatible with both Android and iPhone.
- Barron’s App: Barron also provides an app for iPhone and Android, where subscribers can access articles every weekend from the app. The app also provides commentary from Barron’s online edition every day of the week.
The forex market operates on a 24/7 basis. This means that you have to be on top of news from different economies, even when you yourself are not active. Investing news apps can thus provide the tool which you can use to catch up on news, both in the past as well as in real-time and make trading decisions accordingly.