The Latest Economic Data that You Need to Know

Most investors familiar with forex trading may understand the significance of economic indicators- not only do these statistics reflect the macro-economy and currencies‘ market trends in different countries, they also have much influence on investors’ trading decisions. Release of key economic indicators often increases market activities and thus influences the forex market.

The Fed‘s rate cut has been one of the headline topics recently, there’s another indicator much relevant to the interest rate cut - the ISM non-manufacturing index for October, announced yesterday. This index from US Institute of Supply Management (ISM) tracks non-manufacturing business activities from the previous month, a reading higher than market expectations indicates a bullish trend of the US dollars, while a lower-than-expectation reading means the US dollar is on a bearish trend.

US ISM non-manufacturing index

As the ISM non-manufacturing index reached 54.7, up from September‘s 52.6 and higher than the expected 53.5, the dollar has been beefed up to a highest level since mid-October, thus reducing the chance of further Federal Reserve rate cut. According to the probability data implied by the interest rate market, the expectation for Fed’s target interest rate after December has changed significantly. More specifically, the rate-cut expectation is down from 61.9% on October 31st to 38.1%.

Chart for USD Index

FOMC rat-cut expectation has declined

The indices mentioned above are only examples of the most influential and widely followed ones among many economic indicators. By closely following these data, investors can better grasp the overall economic situation of US or any other country during a particular time. In fact, many major economies in the world such as Britain, Japan or Germany all have their own primary and secondary economic indicators, and investors may pay attention to such statistics as they can have much implication on the positions yourre holding. To get timely global financial updates, you may also check out the 24h Newsflash on WikiFX App.

24h Newsflash on the WikiFX App