If the indicator value in the calendar turns out to be better than the forecast, investors will begin to open more trades to buy the national currency.
If the data is worse than the expectations, they will generally sell.
The greater the difference between the forecast and the actual value, the more the market will react. On the other hand, if the value of the indicator corresponds with the forecast, the market reaction is likely to be less significant.
For example, if the employment rate was previously expected to be 500k but then unexpectedly fell to 220k, the value of the dollar would likely fall as a result of such negative financial news.
However, it is important to remember that trading on news involves significant risk of loss.
Sometimes the foreign exchange market does not react to the news in the way that most traders expect. An example would be if the unemployment rate increased, but at the same time, the number of new jobs in the US private sector (NFP) also increased.
