US Economic Data Impacting The Forex Market – Part 5

In the previous part, you read about a few economic parameters that impact the forex market. Some of the last few data points are:

• Philadelphia Fed Index: This Business Outlook Survey is released by the Federal Reserve Bank of Philadelphia around the 17th of every month and covers business manufacturing activities in the US states of Pennsylvania, New Jersey and Delaware. It is a sound indicator of the state of the manufacturing industry, employment, general price and business conditions. It helps ascertain what the PPI (released later) could comprise.

• Summary of Commentary on Current Economic Conditions by Federal Reserve District or Beige Book: is released by the US Federal Reserve Board before every FOMC meeting, which means that it is released eight times a year, in order to measure economy changes. Its market importance ranges from low to medium.

• Employment Cost Index (ECI): After surveying over 3,000 private sector firms and over 500 local governments, schools and other public sector organizations, the Bureau of Labor & Statistics prepares the ECO and presents it on the last Thursday of the months of April, July, November and January. The ECI measures movements in total labor cost, including wages, bonuses and fringe benefits.

• Personal Consumption Expenditure (PCI): Released by the BEA, this low importance report tracks changes in the price of consumer goods & services.

• Housing Starts: basically measures the quantity of house building permits granted by the US government. It also measures sales of already built homes as a pointer of the state of the US economy.

• Trade Deficits: Trade deficit is the gap created when imports increase with respect to exports. Trade deficit increases are bad for the US dollar because they underlines the fact that people are trading US dollars to acquire goods from other countries, while the opposite, selling products and services to other countries and acquiring their foreign exchange, is not good enough to leverage the effect of the former.