Employment Report
Department of Labor, the first Friday of each month, in the chair. 8:30 EST, covers previous month data
Data is collected through a survey of 375 000 companies and 60 000 households.The report provides an overview of: the number of
jobs created or lost in the economy, the average rate per hour and the average work week. The report is considered one of the most
important economic publications, both due to the new date information disclosure and transfer of the real picture of the state of the
economy.
The report also shows separately the situation in different sectors (manufacturing, services, construction, mining, public, etc.)
CPI – Consumer Price Index (price index of consumer goods and services), Core-CPI
Bureau of Labor and Statistics; Around the 20th of each month, in the chair. 8:30 EST, covers previous month data
The CPI is most commonly used measure of inflation and is considered an indicator of the effectiveness of government policy. The
CPI is the price of the basket of goods and services tracked from month to month (excluding taxes). The CPI is the most widely
watched economic indicator and is considered a very important factor in shaping the market. Rising CPI indicates inflation. Core CPI
(CPI excluding food and energy prices, expenditure items are subject to seasonal fluctuations) is more stringent measure of overall
prices.
CCI – Consumer Confidence Index (Consumer Confidence Index)
Conference Board, last Tuesday of each month, in the chair. 10:00 EST, covers data from the current month
CCI is a survey based on the sample of 5 000 U.S. households and is considered one of the most accurate indicators of confidence.
The concept of consumer confidence survey is based on the assumption that the level of consumer confidence and purchasing
power increases, when the economy more jobs, rising wages and declining interest rates. Respondents answer questions about
their income, they are perceived by market conditions and prospects for revenue growth. Confidence is the subject of careful
analysis of the U.S. Federal Reserve when setting interest rates. It is believed that this is an important factor in the market as private
consumer spending two thirds of the U.S. economy.
Economic indicators
Below is a list of economic indicators that are used in the United States. Of course there are more in other leading economies (in
countries such as Germany, Japan, etc.). Basically count not only the numerical values of the index, but also to anticipate and
forecast and the relationship between anticipated and actual figures on the market.
Globally, a huge number of investors guided by such macro indicators. “Quality” published information changes over time. The value
of the index information is considered valid if it presents new information or assists in drawing conclusions that can not be drawn on
the basis of other reports or data. In addition, the index value is very large, if such rate can help the investor to predict future trends.
Cross rates
Most currencies are sold or bought against the U.S. dollar in the currency pair. Each course without the participation of the U.S.
dollar exchange rate is called a cross (cross quote). For example, the pair GBP / JPY (British pound / Japanese yen).
The rate is calculated taking into account the British pound against the U.S. dollar and Japanese yen against the U.S. dollar.
As a result of this calculation produces a “cross quote ‘:
GBP / USD = 1.7464
USD / JPY = 112.29
Thus, “cross quote” is: GBP / JPY = 1.7464 x 112.29 = 196.10
Which means that one British pound is worth 196.10 Japanese yen.
There are hundreds of cross rates of currencies comprising pairs of exotic, but they often have low liquidity and can be harder to
sell. List of available currency pairs is in the cross rates table tab.
Exchange rates of exotic
Exchange rates of exotic spreads are wider than the basic rates. So be sure to caution the exotic currency transactions and to take
into account when calculating tuning wide potential profit. The spread represents the difference between the price offered by a
market-market investor to buy, and the price what the market (market maker) sells a trader.
What makes exotic currency transactions involving different?
Transactions in currencies exotic transaction differ from the major currencies because of the level of interest in exotic currencies in
the market. The relative lack of activity for exotic currency market means that these currencies have a high price and carry a high
risk.
High risk creates opportunities for high profits. But it is not easy to fully understand the exotic currency market. Such a market is
not safe. Political and financial environment in developing countries may be subject to rapid change and cause the falling and rising
prices of currency.
What is an exotic currency?
The currency is called this exotic currency that is not common in the foreign exchange market. Exotic currency often come from
developing countries, for example, some parts of Asia, Pacific, Middle East and Africa.
Much harder to turn an exotic currency because the market for these currencies do not have the same activity level as in the case of
major currencies. Currencies include basic major and minor currencies.
The principal are those which are most frequently traded. These include the U.S. dollar (USD), euro (EUR), Japanese yen (JPY),
British pound sterling (GBP) and Swiss franc (CHF). Sometimes, this group includes the Australian dollar (AUD) as the main
currency, but usually is considered secondary. Secondary currencies include the Canadian dollar (CAD) and the New Zealand dollar
(NZD).
Exotic currencies are not included in either the main or the secondary, but there are still important in the Forex market.
Advantages of floating exchange rates
Differences in exchange rate can provide an automatic adjustment for countries with large budget deficit. Another key advantage of
floating exchange rates is that they allow the government / state finance supervisory authority for flexibility in setting interest rates.
Exotic currency market
Managed floating exchange rates
Governments normally engage in managed floating exchange rates or partial system of exchange rate adjustment. Fixed rates
provide greater certainty for exporters and importers, in normal circumstances, there is less speculative activity – although this
depends on whether the entities involved in foreign exchange markets regard a fixed exchange rate as appropriate and credible.