Fundamentals and the economic calendar

What interest rates, inflation and jobs data do to currencies, gold and indices, how to read actual, forecast and previous on the economic calendar, and how to trade around big releases safely.

Intermediate Lesson 1 of 3 · 4 min read

⚠️ Risk warning: CFDs and leveraged forex are complex instruments with a high risk of losing money rapidly. Most retail accounts lose money. This content is education only, not investment advice or a recommendation.

A data release in three momentsBeforeCheck the calendarSpreads start to widenReleaseActual vs forecastPrice can jump or gapAfterLet the candle closeThen apply your rulesSurprise = actual − forecastIllustrative sequence. Reactions vary and can reverse.
A data release in three moments

Technical analysis tells you where price is. Fundamentals help explain why it moves. You do not need to be an economist, but you do need to know which numbers move your market and when they come out.

What moves prices

  • Interest rates. Higher rates, or the expectation of them, usually support a currency because holding it pays more. Central bank decisions and speeches are the biggest scheduled events of the year.
  • Inflation (CPI). Inflation above expectations raises the chance of higher rates, so it can lift a currency and weigh on gold and stock indices.
  • Jobs and growth. Employment figures, GDP and business surveys (PMIs) show whether an economy is strong enough for higher rates.
  • Risk mood. In fearful markets, money often moves towards the US dollar, gold and government bonds and away from stock indices.

These are tendencies, not laws. The same number can move a market in different ways depending on what traders already expected.

Reading the calendar: actual, forecast, previous

Every line on the economic calendar shows the previous reading, the forecast (the average expectation of economists) and, once released, the actual number. Most of the forecast is already in the price before the release. What moves the market is the surprise: the gap between actual and forecast.

Worked example (illustrative numbers)

US inflation is forecast at 0.3% for the month and comes out at 0.5%. That is a surprise on the high side, so traders price in a higher chance of rate rises. A typical first reaction is a stronger US dollar: EUR/USD falls and gold dips. If the figure had come out exactly at 0.3%, the reaction would usually be small, even though 0.3% is a high number.

Also look at revisions: if last month’s figure is revised sharply, it can matter as much as the new number.

The releases Gulf traders watch

  • US jobs report (non-farm payrolls): usually the first Friday of the month at 8:30 New York time, which is 16:30 Dubai time in the US summer and 17:30 in the US winter (the UAE has no daylight saving).
  • US CPI inflation: monthly, also 8:30 New York time.
  • US Federal Reserve decisions: eight scheduled meetings a year, with the statement at 14:00 New York time (22:00 or 23:00 in Dubai).
  • ECB, Bank of England and Bank of Japan decisions for the euro, pound and yen.
  • Oil: OPEC+ meetings and the weekly US crude inventory report.

The UAE dirham (3.6725 per dollar) and the Saudi riyal (3.75 per dollar) are pegged to the US dollar, so Gulf central banks usually move their rates in step with the Federal Reserve. US data therefore matters for local savings and loan rates too, not only for forex.

Trading around big releases

In the seconds around a major release, spreads widen, liquidity thins and price can jump past your stop, so the fill can be worse than the level you set (slippage). Common approaches:

  • Stay flat. Close or avoid new trades from about 15 minutes before to 15 minutes after the release. This is the simplest rule and suits most beginners.
  • Reduce size. If you hold through news, cut the position so that a gap through your stop still fits your risk limit.
  • Wait for the first candle. Let the M15 or H1 candle after the release close, then judge the move with your normal technical rules.

Whatever you choose, write it into your trading plan and check the calendar before every session.

🛠️ Practice task

Use the calendar and a real chart. This is for practice, not for placing a trade.

  1. Open the Invvex economic calendar and list this week’s high-impact US releases with their Dubai times.
  2. For one release, write down the previous figure and the forecast before it comes out.
  3. After the release, note the actual figure and whether it was above, at or below the forecast.
  4. Open the EUR/USD chart or the gold chart on M15 and look at the first candle after the release: how far did it move, and did it reverse within the hour?
  5. Write your own news rule in one sentence (stay flat, reduce size, or wait for the first candle) and add it to your trading plan.

✍️ Quick quiz

Check what you learned. Your answers stay in this browser.

1. CPI is forecast at 0.3% and comes out at 0.3%. What usually happens?

Show answer

Little reaction, because it was expected. The forecast is mostly priced in already. The surprise (actual minus forecast) is zero, so the reaction is usually small.

2. Why do Gulf central banks usually follow Federal Reserve rate changes?

Show answer

Their currencies are pegged to the US dollar. The dirham and riyal are pegged to the dollar, so local rates move in step with US rates to keep the peg stable.

3. You hold EUR/USD with a 15-pip stop into the US jobs report. What is the main risk?

Show answer

The stop fills worse than its level. Around big releases, price can jump past the stop and spreads widen, so the fill can be worse than planned (slippage).

4. The US jobs report is at 8:30 New York time in the US summer. What time is that in Dubai?

Show answer

16:30. In summer New York is UTC−4 and Dubai is UTC+4: eight hours apart, so 8:30 becomes 16:30.