The majority of fundamental analysts would agree that the minutes from the Federal Open Market Committee are major events on the economic calendar, but newer traders may wonder why the details are so important. If you’re going to make a success of your analysis from the news and economic announcements, then this is something you really need to know.
What Is The FOMC And What Does It Do?
The committee is part of the United States Federal Reserve System (often casually called the Fed) which is the governing body that deals with monetary policy in the US. Generally, this is done by setting out aims in the open market, and overseeing securities for the US Treasury. Most open market actions are carried out by the Federal Reserve Bank of New York.
What makes the FOMC of real interest to currency traders is that it works closely with the Treasury when it comes to matters of forex. The Treasury usually sets policies for the value of the dollar, but it is the FOMC that directs procedure.
There are twelve voting members on the FOMC, made up of the seven people who sit on the Federal Reserve Board, and five Federal Reserve Bank Presidents. The President of the Federal Reserve Bank of New York is always on the FOMC, and the other eleven are rotated.
Votes are common at FOMC meetings, but only five of the members have voting rights at any given time. Despite this, all who attend the meetings will contribute to discussions and planning. This includes a variety of other Fed staff, not just the presidents and board members.
Discussions include all kind of topics, from domestic issues such as wages and employment, to Forex markets and how the dollar is performing. This is why the minutes from these meetings are so very important to all Forex traders. The dollar is the world’s most important currency, which means that any changes to it can have major impacts all over the world. The FOMC decide short term aims, which can make immediate differences to the markets, especially if they are unexpected.
Meetings occur roughly every six weeks, or eight times a year. If a situation calls for it, the committee may be flexible. You can use economic calendars to find out when the next meeting is scheduled. It’s always a good idea to use a streaming radio service, to make sure that you get the main headlines from the minutes as soon as they’re released. It’s the unexpected that moves markets, so you need to be at the head of the news.
So, whether you’re trading majors or exotics currency pairs, the FOMC meeting is something you should always mark on your calendar. Be ready for it, and the impact the minutes could have on any of your positions or prospects.
If You Want to Become a Successful Forex Trader, You Must Join AndyW Club.
In AndyW Club you can get exclusive Forex trades, analysis and signals notifications via dedicated APP, E-Mail or Telegram. Click Here and Join AndyW Club Now – You Can Cancel Anytime, No Questions Asked!