The economic calendar has become an important tool for traders who utilize it as a part of their work and analysis. It looks like a summary of factors for different regions. One can also observe in it the volatility of an event as well as the actual, previous, and predicted value.
This calendar reflects political events and circumstances, rumors, expectations, publication of macroeconomic statistics, and stock market holidays. Some of these factors can have a long-term effect on the market.
What Is an Economic Calendar?
Economic calendars mark all the news published on a specific day and time for a specific state. At the same time, it is difficult to keep track of all the news, and often, its impact is unpredictable. For example, if some indicator has grown, it would seem that this should have a positive impact on the currency of a certain state or the value of shares of a particular company, but instead of growth, there is a fall since it was expected that the indicator would grow by an even greater amount.
The market is most affected by how the actual value compares to the forecast:
- If the actual value is better than predicted, the first value is highlighted in green on the calendar. In this case, as a rule, there is an increase in the currency.
- If the indicator is worse than predicted, this usually leads to a depreciation of the currency.
In addition, previous values may be revised. For example, the country’s statistics service admits that it has calculated a certain value for a certain month that is not quite correct and can recalculate it. In the calendar, this indicator will be marked with a yellow icon. This can also affect the exchange rate and the dynamics of the country’s financial market.
Keep in mind that some indicators, such as the press conference of central banks, do not have numerical values, as these indicators are not accompanied by the statistics.
Events in the economic calendar are of varying degrees of importance. Traders who are tracking the statistics make up their expectations regarding how, against the existed background, the central bank will change monetary policy or not.
How to Work with This Calendar
A trader can select the currency pair they are interested in and filter events by it, as well as specify the period for which they want to view news on this pair.
This or that currency is a reflection of the economic, social, and political stability of the country. Changes in performance can affect the exchange rate of the respective currency. A pair consists of two currencies, which means that each pair is a balance of the market sentiment of the two states.
For example, in the EUR/USD pair, the US dollar represents the US, and the euro represents the euro area. Accordingly, a trader trading on this pair will be interested in the events that take place in the US and the EU countries.
The calendar provides detailed statistics not only for current dates but also for past periods.