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Top 5 Economic Indicators Affecting Forex Trading

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A number of factors affect Forex trading and it is critical to understand how these factors affect the day to day operation of the Forex market. Economic factors play a vital role in the movement of the foreign currency and these indicators are released by the government or by private organizations keeping a watch on it. These indicators are utilized in judging the economical performance of the country. The economy reports help in measuring the country’s economical health and policies of the government. An experienced broker at XFR Financial Ltd can keep a watch on these economic indicators and judge what will be the best Forex trading move to get maximum profits.

Forex Trading and Indicators XFR Financial Ltd Offers

The economic reports based on the economic indicators tell if the country’s economy is improving or it is declining and this helps in judgment of a Forex trader to take better decisions for achieving maximum profits and minimize losses. The top 5 economic factors affecting Forex market are – Current events and the state of the economy, GDP, Retail Sales report, Industrial Production report and CPI. We will explain the effects of these factors in detail here-

Current events and State of economy

Factors such as unemployment statistics, housing statistics and country’s economic condition have a great impact on the Forex market. When a country feels optimistic about the current affairs, it will be shown in the prices of Forex. When it feels unrest with a big rate of unemployment, it will be again reflected in the current Forex prices. Many times this indicator is overlooked but it serves as a great indicator of Forex fluctuations.


Gross Domestic Product (GDP)

GDP is the biggest measure of the economy of the country and it represents the total market value of all the goods and services produced within the country. It is measured in a larger time period. This indicator is not used alone when predicting a trend when trading currencies with XFR Financial Ltd. It is used in conjunction with the other factors.

Retail Sales reports

It is the total receipt of sales at all the retail stores of the country. This is considered as a very reliable factor because of the overview of the consumer spending patterns throughout the year. This factor gives a clear picture of the economy of the country.

Industrial Production Report

Industrial production report is another reliable factor in the Forex trading. It shows the fluctuations in the production in factories and other utilities. This report is a look at the production in relation to the actual capacity over a period of time. XFR Financial Ltd teaches you that when the production rate is good for the country then its effect is positive for the Forex traders in the country.

Consumer Price Index (CPI)

It is also a critical economic factor which affects the Forex market. It is the measure of changes in the prices of 200 categories of consumer goods. The report on CPI tells that whether the country is having profits or losses on their products and services. The amount of exports is a good reflection of country’s strength or weakness.

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Karthik Linga is working as a Digital Marketing Specialist for past 6+ years and contributes as a part-time blogger by learning newer tactics from the experts everywhere. During his free time, he likes to share some of the mind techniques that help sharpen mental processing and arithmetic calculations.

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