Which news have the most impact on Forex?

03 April 2025

The most significant forex news, such as Non-farm payrolls, interest rate decisions, and inflation rates, can seriously affect Forex currency pairs. In fact, if the trader is not careful enough and opens a position during such high-impact news, there is a strong chance of losing money. The foreign market is sensitive not only to macroeconomic data but also to global economic and political dynamics. Many factors are so intertwined that it becomes a complex task to define how price reacts to these changes. However, anticipating when major economic news is released and implementing strong countermeasures is possible, and we are going to explain how in this guide.

Most Important News for the Market: Economic Indicators

Before anchoring on important news, we first need to understand why some news is so important for Forex traders. Major announcements about key economic events have a tremendous impact on the country’s currency. For example, if the inflation rate is rising, then the value of the currency in question will decline, meaning it will depreciate against other currencies. This is especially amplified if the currency we are trading against is increasing in value. Traders use this information to speculate on currency pairs. If you know that the U.S. dollar has high inflation while the Euro seems stable, strengthened by good inflation rates from the EU region, then EUR/USD will move up, meaning that more dollars are needed to buy 1 euro as a result of the weak dollar.

So, how do you check the news? You need to access the economic calendar which is freely available online and allows for full control of all important news for FX trading.

Below is the list of the most impactful Forex news that every trader should monitor using economic calendars.

#1 News. Non-Farm Payrolls (NFP)

NFP is among the top market headlines for Forex. It constantly shakes Forex markets and is known as the number 1 Forex market mover. NFP measures the monthly change in U.S. employment except government, farm, and nonprofit jobs. When the NFP numbers are released, which is the first Friday of each month, by the U.S. Bureau of Labor Statistics, 50-100 pips movements in 1-2 minutes are a casual event. To make a comparison, the EUR/USD pair typically moves 2-4 pips on a 1-minute and 5-minute timeframe with each price swing. So, this is a huge event that can not be missed by traders, especially if you have open positions in FX markets.

Bullish when: strong figures, when numbers are better than expected.

Bearish when: worse than expected or low.

Practical example: In February 2025, the unemployment rate rose to 4.1% as the U.S. economy only added 151,000 jobs. As a result, the euro experienced its largest weekly rise since the financial crisis against the dollar. NFP is one of the most important news for FX trading, which every trader should monitor closely.

#2 News. Interest Rate Decisions

Central banks such as the Fed (the Federal Reserve, US), the ECB (the European Central Bank), and the Bank of England (BoE) set interest rates. These rates directly affect currency valuations and, therefore, FX rates, which are critical for FX traders. When rates are higher, less money goes into circulation as fewer investors and companies are incentivized to borrow credit for their business. However, when central bank rates are low, companies and consumers can borrow money cheaply, and therefore the value of the currency weakens. Despite a weakening currency, lower rates motivate consumers and companies to borrow more, and the economy, especially stock prices, tends to rise. An important detail to bear in mind for beginner stock traders.

Bullish when: Interest rates hike slows down inflation, strengthening the currency.

Bearish when: Lower interest rates enhance inflation.

Practical example: In November 2013, the ECB cut its main interest rate to a historic low of 0.25% to support the economy. This move led to the EUR losing its value against other currencies, including the USD. This was a great opportunity for FX traders to short EUR and make profits.

#3 News. Inflation Data – Consumer Price Index (CPI)

Although affected primarily by interest rates and other key economic indicators, inflation is a critical indicator for the currency’s health. CPI figures determine how central bank policies will change and affect interest rate decisions, which makes them news to watch out while trading FX. The consumer price index is a powerful tool for inflation as it tracks the changes in the prices of goods and services over time.

Bullish when: Low inflation numbers are released.

Bearish when: High inflation rates are a strong bearish sign.

Practical example: In January 2023, the CPI reading from the USA was 7.5% higher than expected. This led to a rapid sell-off in the USD, and the USD/JPY currency fell over 50 pips shortly after the news event.

#4 News. Gross Domestic Product (GDP) - Is the Economy Growing?

If you want to measure the health of the overall economy of the country, then the GDP is one indicator to track. A growing economy strengthens the country’s currency, and a declining GDP is bearish for it. FX traders typically analyze the GDP data annually or quarterly to forecast trends.

Bullish when: Growing GDP numbers.

Bearish when: Declining GDP readings.

Practical example: In 2023, the UK GDP rate was reported at 0.1%, which was below expectations. This naturally led to a sell-off in the GBP, and GBP/USD fell, which was a perfect opportunity for FX speculators to short the GBP pairs.

#5 News. Retail Sales

Retail sales typically measures consumer spending on goods and services. Higher retail sales indicate consumers are confident and want to spend more, and typically boost the currency. However when consumers await inflation or recessions they tend to focus on savings and do not borrow or spend more, which is bearish for the currency.

Bullish when: Rising retail sales.

Bearish when: A Drop in retail sales.

Practical example: In December 2022, the UK retail sales contracted unexpectedly by 1% month-over-month, which was below the anticipated 0.5%. As a result, GBP experienced a strong sell-off and GBP/USD started to fall rapidly, although this was a short-lived event. Generally, unexpected news readings cause higher volatility.

Political and Geopolitical Events – The Hidden FX Market Movers

Economic news is not the only factor that can seriously shake FX rates. Political events such as elections, instability, or mass demonstrations can also affect the country’s currency. Especially during political uncertainty and instability, currency tends to become volatile and mostly loses its value. Geopolitical events, wars, and pandemics also tend to become FX market moving news.

Elections and Political Instability

Elections create uncertainty, typically causing major currency fluctuations. This is because different candidates might have different economic policies, which directly affect the strength of the currency. Political instability greatly weakens confidence in a nation’s economy and therefore in its currency.

Practical example: The 2016 Brexit referendum led to a serious volatility in the GBP/USD pair. As a result, the pound dropped to its lowest level in decades following the vote to leave the European Union. This volatility created many opportunities for FX traders to short GBP pairs, and some of them made fortunes.

Trade Wars and Tariffs

Recent Trump tariffs showed how trade wars and tariffs can mess up currency markets and crash stock markets. Trade wars between major countries such as the U.S. and China heavily influence currency rates. Tariffs impact both export and import, and a disturbed balance affects national economies and FX rates.

Practical example: The escalation of trade tensions between the U.S. and China in 2018 led to increased volatility in the FX markets, causing safe-haven currencies like Japanese yen to strengthen against both the USD and the euro. Surely, gold was also rising during these times.

War and Geopolitical Tensions

Wars directly and quickly affect FX rates. Military conflicts and diplomatic tensions lead traders to move towards safe-haven currencies like the USD, JPY, and CHF. Gold is also a very beloved safe-haven asset, which has been rising for years due to global political and economic instability.

Practical example: The Russian invasion in 2022 seriously affected the EUR/USD currency pair. Russian aggression led to heightened geopolitical tensions and caused investors to seek safe-haven assets like the USD and Gold. As a result, the Euro depreciated against the dollar, which was only strengthened (USD weakened) by the current Trump tariffs and trade wars.

Natural Disasters and Pandemics

Among the impactful FX news, pandemics and natural disasters find their place. Hurricanes and major earthquakes have a potential to disrupt economic activities and affect a country’s currency negatively.

The COVID-19 pandemic created great uncertainty and influenced FX markets globally. Mass lockdowns are never great for the economy and ultimately, for its currency, and a mass GDP decline was accompanied by side effects globally.

Practical example: The COVID-19 pandemic in 2020 caused an unprecedented volatility in the FX markets and currencies, such as the USD initially strengthened due to its safe-haven status. Fluctuations continued as the global economic impact unfolded, caused by mass lockdowns. Gold has also seen a strong impulse upwards as a result.

Financial Market Crashes

Market crashes are always bearish, but they lead to a rush toward safe-haven assets, which directly impacts currency valuations. For example, the 2008 financial crisis saw massive capital movements that reshaped FX trends.

The news that have a greater impact on the market typically leads to higher volatility, and massive price swings are a usual side effect. Market crashes can wipe out trillions from markets, which inevitably has its impact on the currency.

Practical example: The 2008 financial crisis led to a serious depreciation of the euro against the USD. As a result, the EUR/USD pair dropped to near 1.25 within months of its peak highs around 1.60. Since then, EUR/USD has been moving mostly below 1.2,5, showing the impact of the 2008 crisis.

How Traders Can Respond to the Most Important Forex News

While the news that have a greater impact on the market usually provides great opportunities for traders, beginners should be careful during these events. When high-impact news is released, markets tend to become highly volatile, and price swings become extreme. This can present serious risks for traders who have open positions on the currency pairs that are under the impact of news, causing their stop losses to get triggered due to large price movements. Let’s outline the main approach to anticipate this news and be prepared.

Monitor the Economic Calendar

Controlling the most significant forex news requires careful monitoring of the economic calendar. This calendar is freely available online and enables traders to measure the heartbeat of financial markets. The economic calendar includes information for all important events and news releases, such as NFP, interest rates, and so on.

Monitor Market Sentiment

Trader sentiment analysis is an important measure that can help traders define what other traders are thinking and doing. Market sentiment is also available free, and traders can use both news analysis and technical analysis to gauge market sentiment and make informed decisions.

Deploy Risk Management Strategies

Without stop-loss and take profit orders, proper risk management and risk reward ratios are impossible. Traders must use stop-loss orders to limit losses. However, if the news is, for example, NFP, then extreme volatility might pass the stop-loss level, and beginners should try to avoid trading during this news unless they have a dedicated trading strategy that only trades during highly volatile markets when news is released.

Follow Important Economic and Political News

Apart from monitoring the economic calendar, traders should also monitor the heartbeat of the world economy and important political news. News events such as Trump announcing tariffs or trade wars can decide whether the trader loses or makes money.

Follow Central Bank Statements and Speech

It is also a good idea to follow the central bank statements and announcements to ensure nothing unpredictable happens and throws markets into a state of chaos when volatility becomes extreme and dangerous.

Key Takeaways

These are critical news that have a greater impact on the market:

NFP - U.S. non-farm employment changes, systematically causing sharp price movements (50-100 pips on EUR/USD).
Interest rate decisions - Central banks’ rates directly influence currency strength.
Inflation (CPI) - High inflation causes currency depreciation.
GDP & Retail Sales - Shows overall economic growth and consumer confidence in spending. Weak numbers are bearish for currency.

Other impactful FX news includes:

Political and geopolitical news - Elections, trade wars, and wars increase volatility and push traders toward safe-haven assets like the USD and Gold.

Trading Strategies & Risk Management to counter the most significant forex news:

Always monitor the economic calendar
Use stop loss and take profit orders
Monitor market sentiment and keep an eye on central bank statements and important news about geopolitical events.