When it comes to trading the Foreign Exchange (Forex) market, many investors choose to strategize their trading forecast around the volatility of the economic calendar. This calendar revolves around various government and non-government events that help build momentum and urgency for investors to more accurately target trades.

One of the biggest challenges trading around economic indicators is knowing which events are the ones to keep an eye on. That’s why we’ve gathered a list of the eight most common events our experts consider to have the most impact to generate market volatility.

Economic calendar: Events that affect Forex trading

1. Central Bank rate decisions

Every month the Central Banks of the world meet to discuss interest rates, causing some of the Forex markets highest volatility. Even more so when the interest rate hikes or there has been an unexpected cut.

The central bank has the ability to increase or decrease the discount rate of currencies, causing a drastic effect of macroeconomics including consumer borrowing and spending. With so much activity surrounding these decisions, investors keep close watch during these times to maximize their opportunities.

2. Non-farm payrolls

One of the most common reports Forex traders keep an eye on is the Non-farm Payroll Employment Report that’s produced by the U.S. Department of Labor. This report is valuable to investors because it tracks the number of jobs increased or decreased near the start of every month.

This opens allows investors to gauge the health of the economy and the height of interest rates. The higher the rate, the more intrigue will follow foreign traders to bite which, in turn, increases the overall demand for the U.S. dollar. The opposite goes for a loss in job market, which will lower the drive of demand.

3. Unemployment rate

The unemployment rate has close ties with the Non Farm Payroll released every month, and is defined as the percentage of the labor force that is actively in search of work. This is a key indicator of the health of an economy.