Forex Trading Using Intermarket Analysis

eVenTs and rePorTs THaT aFFeCT
Forex markeTs
Federal open market Committee (FomC) meetings and Fed 
actions. 
FOMC meetings take place eight times a year, spaced 
about six weeks apart. The FOMC consists of seven governors of the 
Federal Reserve Board and five Federal Reserve Bank presidents 
and determines the near-term direction of U.S. monetary policy. 
The Fed has several actions it can take to stimulate or tighten the 
U.S. economy to maintain a balance between too little growth and 
too much inflation, its major tool being the power to raise or lower 
short-term Fed funds interest rates. Almost as important as what 
the Fed does with interest rates is the statement it releases at the 
end of each meeting, suggesting the posture with which it views the 
economy and sometimes hinting at what it intends to do in the future.
The importance of interest rates cannot be overlooked by the forex 
trader. All else being equal, a nation with the higher interest rate will 
attract more money than the lower interest rate nation and will thereby 
have the stronger currency.
Beige Book. 
Each of the twelve Federal Reserve regional districts 
provides reports on the economic outlook for their region, and the Beige 
Book combines these reports into one composite view of the status of 
the U.S. economy. Information on economic conditions from this report 
often guides the FOMC in setting monetary policy. Reports from indi-

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vidual Fed banks, especially the Empire State Index from New York and 
the Philadelphia Fed report, may have their own impact on markets.
index of leading economic indicators (leis). 
Although most 
reports lag the market because they are based on past data, 
LEIs are a
composite index of ten economic indicators that pre-
dict the health of the U.S. economy. Individual indicator read-
ings may not provide much evidence of growth or weakness 
but can be helpful when combined with other indicator data.