LONDON, January 25, 2012 /PRNewswire/ --
One of the most important catalysts for short term movements in the forex markets is economic data. This provides plenty of opportunities for currency spread betting based on news and data from around the world. Forex spread betting provider City Index explains how to trade the news with spread bets on popular currency pairs.
It is no secret that the US dollar is involved in around 90% of all currency trades, which means that US economic releases tend to have the most profound impact on the forex market. In December, the sharp rise in US Non Farm Payrolls gave stronger signs of the US economic recovery, giving additional strength to the US dollar and pressurizing the value of other currencies which were paired against the dollar.
When trading the news, learning which releases are due each week will help you to create a better spread betting plan while also taking into account analysts' expectations could help to you speculate on the potential movements of your chosen currency pairs.
Generally the most important economic releases for any country are: Unemployment, Interest rate decisions, GDP, Retail sales, Inflation (CPI or PPI), Industrial production, Business sentiment surveys, Consumer confidence surveys, Trade balance and Manufacturing sector surveys.
The importance of each can vary depending on country and the amount of trader sensitivity surrounding that country's currency at the time,, which is why it is important to follow the news closely and stay up to date with what the market is focussing on.
Economic releases usually create fluctuations in currency values, making the short period before their announcement the subject of much speculation for traders. However, sometimes the currency's value changes based on rumours ahead of the announcement. And if the announcement is in keeping with rumours or consensus expectations, then there may in fact be no major change in the currency rate. So it pays to research thoroughly before committing to a spread betting position.
Meanwhile, forex spread betting allows you to deposit only a small percentage of the total value that you wish to trade. This product also gives you the ability to go long or go short and being able to trade across a wide range of currency pairs. However, leveraged products can result in losses greater than your initial deposit, which is why it is important to educate yourself and understand the risks.
For more information on currency spread betting, visit http://www.cityindex.co.uk/range-of-markets/currencies-spread-betting.aspx
Spread betting and CFD trading are leveraged products which can result in losses greater than your initial deposit. Ensure you fully understand the risks.
About City Index:
Today more and more individual traders are discovering the benefits of derivatives, and many of them are discovering them through a City Index trading platform.
As a group, we transact in excess of 1.5 million trades every month in over 50 countries. We provide access to a wide range of instruments including margined foreign exchange, CFDs and, in the UK, financial spread bets.
We constantly look to improve the performance of our platforms and expand our range of services. The result is our customers benefit from innovative trading tools with transparent pricing, competitive spreads, and a high standard of customer support. Visit http://www.cityindex.co.uk/ for details.
SOURCE City Index