The following events are required for Euro Currency Trading. These events can give a major impact on the common currency (the EUR). For forex (FX) traders, it can be such kind of a daunting task to do.
Among 27 member states of the EU (European Union), the euro is currently the official currency. The Eurozone or euro area is formed by these 19 member countries. Each year, hundreds of economic reports are exit the eurozone that is relevant to the FX market.
But, the question is how do people know which economic reports will move the market?. There are 27 members of the European Union, but the economic reports can be generated by few who are large enough.
Euro Currency Trading (Inflation and Prices)
All currencies are affected by a key factor called inflation. Generally, a country that has inflation rates in high level relative to other will usually experience depreciation of their currencies so that the price of goods remains relatively the same between countries.
High inflation level than what expected will cause the raising of the interest rates by the bank to tame inflation. In the Eurozone, the main measure of inflation is the CPI (Consumer Price Index). The price of a basket of items that likely to be purchased by an ordinary household is calculated by this indicator.
Sentiment and Confidence
Look at sentiment and confidence reports is the other way to measure economic conditions in the Eurozone that can affect the Euro Currency Trading. The German ZEW is one of the sentiment reports that widely followed. The European Economic Research Center prepares it monthly.
Almost 350 financial experts become the sample of the survey where they saw the economy heading towards a medium-term horizon. Responses are no change, or negative, it limited to positive. There is a clear reflection of the ZEW indicator because of this simple response structure.
It reflects whether analysts and experts are pessimistic or optimistic about the medium-term of the economy. Experts for the United States, the eurozone, Great Britain, and Japan are also questioned in the survey. Like most major indicators, analysts will have a forecast of their expectation of the indicator.
Monetary Policy
The monetary policy of each currency’s central bank is influences them. A decision on interest rates made by the European Central Bank can give a significant impact on the Euro Currency Trading. In general, the most important news to be followed is the ECB press conference.
The press conference provides clues as to where the expectation of the ECB president related to the economic movements. If the ECB president’s language appears hawkish, it means she worried about inflation that could increase the future rate and make the euro to appreciate.
Economic Growth and GDP
A report that informs the eurozone’s overall economic output is also important. Economic health and growth are usually measured by a periodic measure of the total value of services and goods produced or we can call it the GDP.
Generally, GDP growth is a sign of a healthy and strong economy and positive for the currency to trade with the best forex broker. The Eurostat release Eurozone GDP (a quarterly report) after the end of the quarter (about two months).
As you may know, this makes the report a bit premature, and because analysts can measure the strength of an economy using several methods, usually, they anticipate GDP in advance. Nevertheless, the currency market is likely to move with the release of this report.
Balance of Payments
Finally, we will look at the current account and trade balance which are parts of the balance of payments. A country’s balance of payments is made up of the current account which is part of the three accounts (the other two are capital accounts and financial accounts).
Many economic indicators affect the euro, make it seem difficult to be traded in the FX market. With didimax forex broker, you can learn all about forex and start your trade with various currencies such as Euro Currency Trading.
