The traders buying and selling in the forex market rely largely on the information contained in the economic reports released from time to time. They give different indications to the market about the improvement or decline in the country’s economic health. The forex trader has to follow these reports closely, in order to improve his trade. All of these economic reports serve a specific purpose and can be of use in one situation or the other. However, some of the more important economic reports are:
1. The Gross Domestic Product (GDP): GDP is considered as the most important measure of the country’s economy. The two reports which are issued a couple of months before the final figures of GDP are very important. These include the advance report and the preliminary report. They are given a lot of significance by the forex traders.
2. Retail Sales: This report gauges the sum receipts of all retail stores in the entire country. This calculation is commonly developed from a diverse sample of retail stores throughout the nation.
3. Industrial Production: Industrial report depicts the change in production of mines, factories and utilities within a nation. The traders who closely follow this report are normally concerned with utility production.
4. Consumer Price Index (CPI): The CPI is a measure of the average price level paid by urban consumers for a fixed bunch of goods and services. A range of user fees and taxes directly connected with the costs of specific goods also form part of the CPI.
Most important economic indicator to track is undoubtedly Gross Domestic Product (GDP), as agreed by most of the economists. Other key indicators comprise Industrial Production, Purchasing Managers Index (PMI), Producer Price Index (PPI), Consumer Price Index (CPI), Durable Goods Orders, Employment Cost Index (ECI), Retail Sales and Housing Starts.
These economic indicators are essential for the forex traders as they measure the condition of the economy of any given country and an experienced trader judges the future trends in the economic market by studying these indicators.
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