What are economic indicators, and how do they impact forex markets?

Answer 1

Economic indicators are statistical data that provide insights into the overall health and performance of an economy, influencing key decisions in financial markets. In the context of forex (foreign exchange) markets, these indicators include metrics like GDP growth, inflation rates, employment figures, and interest rates. They serve as signals for traders and investors to predict currency trends and make informed trading decisions. For example, strong economic growth or rising interest rates in a country may lead to an appreciation of its currency, while high inflation or poor job data can weaken it. As these indicators are released, they can cause significant volatility in forex markets, as traders react to the potential impact on a country's economic stability and future outlook.