The price movement descriptions in this article are in their simplest forms and do not take into consideration any other factor. During your Forex medlegalhq trading course you will learn that there are other factors to consider when predicting price movement but for the sake of explanation they are not included in this article.
The most important thing to remember with economic news is that only unexpected news moves the markets.
1 – GDP and GNP
Gross Domestic Product (GDP) is a measure of the total value that a country outputs i.e. a reading of all economic activity. The Gross National Product (GNP) is the same as the GDP but it also takes into account a country’s earnings from overseas. To simplify, benefits of red light therapy the GNP measures all the money made by the country’s residents regardless of where in the world they make it. This means that:
· A currency value will increase with an increase in GDP / GNP
· A currency value will decrease with a decrease in GDP / GNP
GDP and GNP are easily calculated and the forecast happens ahead of the news report and so figures only move the markets when the report includes a large difference compared to expected results.
2 – Producer Price Index (PPI)
In your Forex trading wealth4living course you will learn that these are the prices that producers charge to the retail sector. This is an important indicator as it directly relates to the retail prices charged to the consumer – you. The market is very sensitive to this and unexpected change in the PPI. This means that:
· A currency value will increase with an increase in PPI
· A currency value will decrease with a decrease in PPI
PPI is also affected by overlying commodity prices as this raises the cost of production and therefore the amount charged by producers to retailers.
3 – Industrial Production
This is a set of numbers that show the total monthly output of a country’s sho entire industrial output including factories, mines and utilities. You should have learnt in your Forex trading course that Increasing numbers in industrial production is a strong indicator of economic growth. This means that:
· A currency value will increase with an increase in Industrial Production
· A currency value will decrease with a decrease in Industrial Production
4 – Unemployment
You will come across unemployment news throughout your Forex trading course as this is the most watched news announcement by most market esl lessons participants. High unemployment indicates low growth for a country, this is down to the fact that the more unemployed there are in a country the less disposable income and lower spending there is.