Which News Events Are Worth Trading?
Before you jump into developing a “trade the news” strategy, you need to first figure out which news events are even worth trading.
Ask yourself:
“Which news releases should I actually pay attention to?”
As a forex trader, it’s crucial to focus on key economic events that have a major impact on currency values.
Why?
Because we trade the news for one big reason: it stirs up volatility—and that means trading opportunities.
So naturally, we want to focus on news that moves the market most. These include:
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Central bank policy changes (monetary policy)
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Government policy shifts (fiscal policy)
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Surprise results in economic reports
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And yes, even unexpected tweets from world leaders who enjoy skyscrapers and attention
Being aware of upcoming news events helps you avoid getting caught on the wrong side of the market.
How to Spot Market-Moving News
To keep up with impactful news, use tools like the BabyPips.com Economic Calendar. It highlights important events and data releases from the world’s major economies.
Now, let’s be real—hundreds of events can be scheduled in a single week. That’s a lot of info to sort through!
Thankfully, the calendar lets you filter events by importance.
For example, select only “High Impact” events to see the ones most likely to shake the markets.
Over time, you’ll notice that the most influential reports tend to focus on:
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Interest rate decisions
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Inflation reports (CPI, PCE, PPI)
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Employment data (e.g., unemployment, wage growth)
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GDP (economic growth)
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Retail sales and consumer spending
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Business and manufacturing sentiment surveys
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Housing statistics
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Trade balances
Different countries may use different names for these reports, but most economic calendars (like ours) will point that out.
Also, keep in mind that the importance of these events can shift over time.
For instance, interest rate decisions might be the main focus now, but six months from now, markets might care more about inflation or employment data.
So stay informed. Always know what’s driving the market's attention right now.
U.S. News Has the Biggest Impact
While news from all major economies matters, U.S. news dominates the forex market.
Here’s why:
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The U.S. has the largest economy in the world
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The U.S. dollar is involved in about 90% of all forex transactions
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It’s also considered a financial superpower
So naturally, news coming from the U.S.—especially related to interest rates, inflation, and employment—tends to cause the biggest market moves.
Besides economic data, also watch out for:
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Geopolitical tensions
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Wars or pandemics
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Natural disasters
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Political unrest and elections
Even if these don’t always cause immediate volatility, they can shift market sentiment—which matters too.
Also, keep an eye on the U.S. stock market, as moves in equities often hint at upcoming shifts in currency markets.
Choosing the Right Currency Pairs to Trade the News
Once you’ve identified a major news event, the next step is figuring out which currency pair to trade.
As a news trader, your main goals are:
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Capitalize on short-term price spikes
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Keep trading costs (like spreads) as low as possible
That’s why you should stick to highly liquid currency pairs—they have tighter spreads and better execution.
Some of the most liquid and widely traded pairs include:
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EUR/USD
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GBP/USD
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USD/JPY
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USD/CHF
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USD/CAD
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AUD/USD
Noticed something? Yep—they’re all major currency pairs.
Because these pairs are so liquid, they typically have the tightest spreads. And since spreads often widen during news releases, it's best to start with those that are already tight to begin with.
Now that you know which news events and which currency pairs to focus on, it’s time to learn how to trade the news effectively. Let’s explore some strategies!