Economic indicators are major economic events that are used to interpret investment opportunities in Forex trading. They usually are macroeconomic events that affect currencies and stock prices.
The indicators can be leading (predict upcoming changes), coincident (show the current economic state of the particular area) and lagging (confirm patterns and trends).
Top economic indicators:
The US Treasury Yield Curve – shows the ratio between short-term Treasury bills and long-term Treasury bonds. This indicator successfully predicted eight major recessions of the past years.
GDP (Gross Domestic Product) – one of the most critical metrics of the economy's health. It is a lagging indicator, so it shows what has already happened, but can be a great marker of an upcoming recession.
Unemployment Rate – this is a percentage of people seeking jobs and will indicate how healthy the labor force and, thus, the economy really is.
Interest Rates – another lagging indicator that shows economic growth. It can affect GDP and inflation, so be aware of this one.
These are some of the few important indicators. Make sure to follow our daily trading plans from FBS analysts to learn more about the current trading news events and how they will affect your Forex trading.