Analytical methods for predicting future foreign exchange volatility by analyzing “basic elements of the economy" such as interest rate policy or employment statistics.
The value of the economic indicators is predicted as follows. First, experts such as financial institutions or expert advisory groups will make predictions, next information providers such as Reuters will collect and summarize, then aggregate as a market forecast.
In addition to this predicted value, the actual published value (foreign exchange movement will follow the prediction or will be different from expected) is also very important and it will become a major cause of market volatility after the announcement of the predicted value.
Foreign exchange immediately after the announcement of the economic indicators will have high probability of fluctuating on one side in a few minutes, so taking advantage of this fluctuation you can make money from Forex trading.
How to profit from the U.S FOMC announcement!
FOMC (Federal Open Market Committee) refers to a committee that holds meetings to decide on U.S national monetary policy, similar to “Bank of Japan monetary policty meeting” in Japan or “ECB Governing Council” in Europe.
The FOMC is held eight times a year (basically on Tuesday every six weeks).
Discussed based on the district reports prepared by U.S.
Federal Reserve Banks, policies regarding adjustment of money supply, interest rates and foreign exchange rates are determined.
The contents of the statement to be announced afterwards attract even more attention than the results.
Based on the statement, prediction can be madeas to whether interest rates will rise in the market in the future.