Lesson C2 · Part C: Reading the Market8 of 107 min
Catalysts: data, central banks and surprises
Why interest rates rule currencies, and how to read an economic calendar like a trader.
§1Rates are the gravity
Over time, money flows toward currencies that pay more interest, adjusted for risk. That's why central bank decisions — and every data point that changes expectations of them — move currencies.
Inflation, employment and growth data matter mostly because of what they imply for future rates.
§2Actual versus forecast
Markets price in the forecast before a release. What moves price is the surprise: the gap between the actual figure and what was expected.
Our Catalysts sheet lists the week's releases with forecast, previous and — once it prints — the actual figure, so you can see surprises as they happen.
01US Non-Farm Payrolls · Forecast 185K · Actual 240K
02Surprise: +55K stronger than expected
03Typical first reaction: USD up (higher-for-longer rates)
remember this:
- Interest-rate expectations are the main long-run driver.
- It's the surprise versus forecast that moves price, not the number itself.
- Know when high-impact releases land before you trade.
Checkpoint
Q1.CPI comes in exactly at forecast. What is the most likely reaction?