The Economy In The U.S.
If you want to know what the state of the economy is in the U.S., all you have to do is wait for the release of the Beige Book reports; it’s as important as the Tertiary Industry Index for Japan. Most currency traders count on such news announcements in order to gage market conditions, investor sentiment and price changes.
Hence, a report such as the one that’s issued by the board of the Federal Reserve comes in quite handy when trying to forecast currency behavior.
Perhaps you’ll find it interesting to know that the Beige Book is not an accumulation of data put together by one individual. It’s a summary of surveys that banks gather, after interviewing key business people in their communities. These inquiries then become part of the decision-making process of the FOMC. And as you may know, the FOMC is responsible for changes in interest rates and other important monetary policies that not only affect the country, but the overall currency market.
If you’re thinking that this Beige Book is extremely powerful, then you’ve gotten the picture of what it can do. In fact many factors and economic indicators have the uncanny ability to shift market sentiment. If the health of the U.S. economy is perceived as strong, it will attract foreign investments and hence, strengthen the value of the U.S. Dollar. So if you’re trading the Norwegian Krone versus the greenback, the information will help you decide whether to buy or sell.