The announcement of major economic data often leads to fluctuations in the foreign exchange market. For newcomers to Forex, we recommend that you be very careful in the data market. It is worth noting that market expectations tend to have more impact on prices than actual data. Therefore, investors need to pay close attention to the expected value and be alert to any inconsistencies that may lead to market volatility. Usually corrected after the data is released. Pay attention to the similarities and differences between the previous and the previous period, which can help you accurately analyze future data. Understand the value of fundamental data. It can usually be used to identify trading signals.
We have seen that various countries often publish some economic data, such as PPI, CPI, RPI, UE, etc. What do these English mean?
PPI (producer price index)
Explain the price of raw materials, which can be used to measure the price changes of different commodities at different stages of production. Countries use the Bureau of Statistics to collect quotes for various commodities from major manufacturers. Calculate the percentage by yourself to calculate the percentage. The data released by the United States is now calculated as the 1967 index as 100. This indicator is published by the Ministry of Labor. Once a month, everyone sees that if the index is higher than expected, it indicates that there is the possibility of inflation. In this case, we will conduct a study to consider whether to implement a tight monetary policy, so that the country’s currency tends to appreciate, which will produce positive. If the index is worse than expected, then the currency will fall.
CPI (Consumer Price Index)
This index reflects changes in the prices of consumers paying for goods and services. This index is also a frequent reference by the Federal Reserve Board. Greg used him to measure the extent of domestic inflation in the United States. And make a judgment by cutting interest rates. This indicator is also published in the United States by the Ministry of Labor once a month, and should be taken seriously. When this index rises, it shows that the inflation rate in this region has risen, indicating that the purchasing power of the currency has decreased. In theory, the currency is not good, which may cause the currency to depreciate. At present, the European Central Bank puts inflation control at the forefront. Position, so inflation will benefit the currency. If inflation is controlled and interest rates fall back at the same time, the currency will fall.
RPI (Retail Price Index)
In the United States, this data is sampled by the US Department of Commerce on a nationwide commercial enterprise every month, and retail goods that are paid in cash or credit cards are used as survey objects, including furniture, electrical appliances, and goods sold in supermarkets. And medicines, etc., excluding consumption in the service industry. If the economy of the society develops rapidly, personal consumption will increase, and oversupply will lead to an increase in prices. This index will rise, which will bring inflationary pressure. The government will tighten monetary policy and interest rates will As it rises, it will provide favorable support for the US dollar exchange rate.
UE (unemployment rate)
According to the statistics of the Ministry of Labor of this country, the government publishes a sample survey of families across the country to judge the employment situation of all the working population in the country during the month, and if there is a willingness to work, it is not yet employed. This figure is the unemployment rate. This indicator is a very important indicator of the economy. Take the euro zone as an example: when the euro started, the unemployment rate of the EU countries was above 10%, higher than that of the United States, causing the euro to fall all the way. At the beginning of November, Japan’s unemployment rate fell from 5.5% to 5.4%, which caused the yen to break through the 121 mark and reach the 119 water level.
Foreign trade balance figures
This is the main indicator for measuring the trade situation of goods between countries and is an important part of economic activities. If a country’s total imports are greater than exports, this is the trade deficit, and vice versa. If a country’s trade often has a deficit, the probability of a country’s currency depreciation will be large because it requires a currency depreciation to increase the country’s commodity export competitiveness; otherwise, it is optimistic about the currency.
Comprehensive leading indicator
This is an indicator used to predict economic activity. In the United States, for example, the US Department of Commerce is responsible for collecting information, including stock prices, new consumer orders, average weekly unemployment benefits, construction, consumer expectations, and manufacturers’ failure to pay. Economists can use this series of indicators to judge the future economic direction of the country, such as changes in orders, money supply, sales, production and sales of raw materials, plant equipment, and average work week. If the leading indicator rises, it shows that the country’s economic growth is conducive to the country’s currency appreciation. If this indicator declines, it indicates that the country’s economy has signs of recession, which is unfavorable to the country’s currency exchange rate.