The Economic Calendar is used by traders to track the occurrence of market-moving events. The Trader needs to stay way ahead of event announcements and act accordingly so that by the time an announcement is made, he/she has already priced the value of their currency pair. On the whole, the biggest market-moving events tend to be the release of key economic data such as the US nonfarm payroll number.
The easiest way to manage the information from announcements is to follow an Economic Calendar.
Through using this efficient economic tool, you can track key indicators which will present you where the market is headed and what may impact your currency movements. The knowledge of future economic and political indicators and coming events is not only beneficial, but crucial factor for a good trader.
To make the picture clearer, let’s assume that the Bank of England and the European Central Bank plan to meet later next month to discuss the policy of interest rates. You can forecast whether the rate will be raised or lowered through the knowledge of this meeting. An experienced trader will take long or short positions in both GBP/USD and EUR/USD respectively. If however interest rates are expected to remain the same, traders will check other factors out that might affect the direction of a currency pair.