Macroeconomic releases serve as the beating heart of Forex volatility. Among the most impactful are non‑farm payrolls (NFP) in the United States, which report monthly employment changes, and Consumer Price Index (CPI) figures that gauge inflation trends. A stronger‑than‑expected NFP print, for instance, often triggers sharp appreciation in USD pairs as markets price in more aggressive Fed tightening. Conversely, weak industrial production or retail sales data can undermine confidence in a country’s economic trajectory, leading to sell‑offs in its currency.
Purchasing Managers’ Index (PMI) surveys covering manufacturing and services sectors offer forward‑looking snapshots of business sentiment. Readings above 50 typically signal expansion, while sub‑50 readings indicate contraction. Because these surveys are released early in the month, they can set the tone for risk appetite and global capital flows. Balance of trade reports, which compare exports against imports, also influence currency valuations; sustained trade deficits may weigh on a currency’s long‑term strength. Savvy traders consult economic calendars religiously, adjusting position sizes and stop levels ahead of high‑impact events to manage risk, and then leveraging the “volatility window” that follows to capture rapid price movements.