GDP: Important in Forex trading
One of the most market moving fundamentals for the Forex markets happens to be the general health or growth rate of the economies in question. If it's the dollar we're talking about then it's the growth of U.S. GDP.
When it comes to trading Forex one could wait around for the quarterly GDP reports, but those are already a month or a quarter old. The secret is to try to get a handle on GDP growth before these reports come out and to have an understanding of the driving forces of economic growth so as to be sure of what the trend in the forex market will be.
Government spending an important GDP determinant
For example, if government spending, which is the second largest component of GDP is strong and rising then it is probably a good bet that the trend in GDP growth will be strong and rising, too.
That will be perceived by market participants and traders as being bullish for the dollar and they will tend to buy the dollar causing it to enter into an rising trend.
Using the Daily Treasury Statement to forecast GDP
Anticipating the trend in GDP is very important and that is the reason why I frequently check the Daily Treasury Statement that is released each day at 4pm Eastern Time. The Daily Treasury Statement is the most up to date reading on government spending. It lists every line item of government spending.
Since every dollar the government spends equates to income paid to someone (individual, firm, institution, foreign government) it is the most leading indicator of the economy. It is what we call, a leading "flow."
Get my video course!
I offer a video course on the Daily Treasury Statement for those interested. You can purchase that course here.
For Forex traders like myself the information is indispensible. It gives me a very powerful "macro" view of one of the principal drivers of the economy and that is government spending.
To understand how to use the Daily Treasury Statement in your own Forex trading consider purchasing my 30-hour video Forex trading course. I am currently offering it at the special price of $250. To purchase the course please click on the button below.
