What is News High Impact?
News High Impact is economic data and policies published by certain authorities from a country that can have a significant impact on currency market fluctuations. This data is generally considered important by market participants because it reflects the fundamental condition of the national economy, as well as prospects for economic growth in the future. Therefore, high impact news is mostly the center of attention of market players and often becomes the basis for decisions to be taken by market participants.
From the perspective of forex traders, high impact news is an important moment that allows traders to make big profits instantly. This is because market conditions when the news is released are often very volatile. So that the price movement range increased several times wider than the daily average price movement range. As a result, many forex traders deliberately wait for high impact news moments to be released, in order to gain these benefits.
However, in their efforts to profit from market conditions that are influenced by high impact news, it is not uncommon for traders to suffer large losses and even experience margin calls. Therefore, apart from being an opportunity to be able to make many times larger profits, high impact news is also synonymous with momentum where many traders lose big due to wrong predictions of price direction and ignoring risk management.
Various High Impact News
Basically there is quite a lot of news in the high impact category. If mentioned in detail, each country has some high impact news, and other countries also have their own high impact news. So that cumulatively, the numbers will be very large and impossible to mention in this review.
And because of that we will only discuss several types of high impact news that are often considered by forex traders.
1. US Non Farm Payroll
US Non-Farm Payroll or US non-farm employment is data on US non-farm employment, households, government and non-profit organizations. This data is released by the US bureau of labor on the first Friday of every month. NFP data had become news with a very significant impact and was considered the most important. However, in recent years, the impact of US NFPs has declined drastically.
2. Trade Balance
The trade balance is the difference between the value of goods exported and imported by a country. Trade balance is an indicator to measure all international transactions and is an important component in calculating the balance of payments.
There are two conditions in a trade balance, namely: surplus and deficit.
Surplus is a condition where the value of exports is higher than imports. While the deficit is a condition where the value of imports is higher than exports. These two conditions actually do not always reflect a positive or negative situation. Surplus and deficit can be both positive and required for certain economic conditions. For example, a surplus condition is very useful when the economy is in a recession, while a deficit condition is needed when the economy is in an expansion phase.
3. Interest Rate Statements
Interest rate statement is the publication of interest rate policy made by a country’s central bank. Usually the central bank will convey policies in setting interest rates higher, lower or the same as before. Interest rate is high impact news with the most significant impact at this time. Because it has an effect on increasing or decreasing the growth of the investment sector of a country.
Higher interest rates will attract foreign investors to invest in a country. Meanwhile lower interest rates will encourage the growth of the domestic business sector thereby increasing economic activity and alleviating several problems such as unemployment and poverty.
4. US Durable Goods Orders
Durable Goods Order is data that shows the statistics of durable goods orders by consumers in the US. Durable goods order data is issued by the United States Census Bureau and published every 20th.
This data is considered an important indicator to see the prospects for the US economy, because the increase in orders for durable goods (Durable Goods) shows that the ability to consume in the business sector and households is improving and shows the prospects for US economic growth in the future.
5. US producer price index
Producer price index is an index of changes in the average price received by producers for the goods they produce for the domestic market. This index is one measure in assessing a country’s inflation rate through changes in production costs.
The PPI index which often includes high impact news in forex, especially the PPI index published by the US. The US PPI index is published by the US bureau of employment and is the oldest economic data recorded by the federal government.
6. US Consumer Price Index
The US Consumer Price Index is data on changes in the average price of goods and services consumed by US people. This index is also an important indicator because it can be used to measure US inflation and deflation rates. And because of that, it is often considered by traders as one of the data that can have a big impact on the forex market.
CPI is also important economic data for other countries and has a large impact on the value of its currency. However, for forex traders the US CPI is of more concern as the US dollar is the most traded currency globally. so the impact of the US CPI is believed to be much bigger on the forex market than the CPI of other countries.
7. Unemployment rate
Unemployment rate or unemployment rate is an important indicator in a country’s economy. This indicator not only shows how many people are not working, but even how the prospects for a country’s economic growth in the future. This is because the increase in unemployment is caused by too few jobs due to a decrease in consumption or other problems that make the business sector decline.
Therefore, the unemployment rate is considered an important indicator because it reflects many things related to the country’s economic situation.
Conclusion
So, high impact news is data or policy publications that can fundamentally affect economic growth. These data can affect the level of demand for a country’s currency so that its exchange rate strengthens or weakens against other countries’ currencies. Therefore, the moment when the data is released is often used by forex traders to make big profits instantly. Because generally there will be significant changes in currency prices.
