Module 2: The Big 5 — NFP, CPI, FOMC, GDP, PMI
Five economic releases cause the majority of big moves in Forex. If you understand only these five, you understand most of what drives currency markets. Here is what each one is and how it moves price.
1. NFP — Non-Farm Payrolls
Released the first Friday of every month at 13:30 GMT, NFP measures how many jobs the US economy added (excluding farm work). It is the single most-watched release in Forex.
How it moves the market: Strong jobs = healthy economy = the Fed can keep interest rates high = USD strengthens. Weak jobs = USD weakens. It comes with two other numbers — the unemployment rate and average hourly earnings — and you must read all three together.
2. CPI — Consumer Price Index
Released monthly, CPI measures inflation — how fast prices are rising. It is the number that most directly drives interest rate decisions.
How it moves the market: High inflation = the central bank must raise or hold rates high = currency strengthens. Low inflation = rate cuts become likely = currency weakens. Always check both the headline figure and the “Core” figure (which strips out food and energy).
3. FOMC — Federal Open Market Committee
Eight times a year the US Federal Reserve announces its interest rate decision and holds a press conference. This is the most powerful single event in Forex.
How it moves the market: The rate decision itself is usually expected. The real mover is the language — whether the Fed signals more rate hikes ahead or signals it is finished. A single sentence change can move the USD 100–150 pips.
4. GDP — Gross Domestic Product
Released quarterly, GDP measures the total output of an economy. Two negative quarters in a row officially signals a recession.
How it moves the market: Strong GDP supports higher interest rates and a stronger currency. A negative or weak GDP triggers recession fears, rate-cut expectations, and a weaker currency. It also moves stock indices and commodities heavily.
5. PMI — Purchasing Managers Index
Released monthly, PMI surveys business managers about whether activity is rising or falling. The key number is 50: above 50 means the economy is expanding, below 50 means it is contracting.
How it moves the market: PMI is a leading indicator — it predicts where GDP and jobs are heading before the official data arrives. A PMI crossing above or below 50 is a strong tradeable signal.
Quick reference table
| Release | Measures | Frequency |
|---|---|---|
| NFP | US jobs added | Monthly (1st Friday) |
| CPI | Inflation | Monthly |
| FOMC | Interest rates | 8 times/year |
| GDP | Economic output | Quarterly |
| PMI | Business activity | Monthly |
Next: Module 3 shows you exactly when to enter a trade after a release — and why patience beats speed.