The world of foreign exchange can be complicated at first. The numbers can look quite intimidating for newbies. But what make it scarier at first are the terms being used by the experts in the forex market. One term that newbies need not be intimidated of is the Purchasing Managers Index or the PMI. The PMI can greatly affect the forex news . But before the forex news is discussed, you need to know what PMI really means first.
Defining Purchasing Managers Index
The Purchasing Managers Index or the PMI serves as an economic indicator. The PMI’s function is to measure and calculate the performance in the foreign exchange business every month. The measurement is done by monitoring the percentage of improvement or setback of the business from the prior month.
The releasing of PMI has a strict schedule. The Purchasing Managers Index is announced every month on its first business day. This usually happens at exactly 10 in the morning. Now, there are also specific interpretations for the PMI reports. If the reports are above 50, that shows growth, while reports below 50 show contraction.
How PMI affects Forex News
Numbers in the foreign exchange market can change rapidly every minute. That is why drastic changes in the PMI can easily affect the forex news. If reports get too low, they can make waves in the forex market. Of course, if reports are high and positive, it can also start news in the world of forex.
Defining Purchasing Managers Index
The Purchasing Managers Index or the PMI serves as an economic indicator. The PMI’s function is to measure and calculate the performance in the foreign exchange business every month. The measurement is done by monitoring the percentage of improvement or setback of the business from the prior month.
The releasing of PMI has a strict schedule. The Purchasing Managers Index is announced every month on its first business day. This usually happens at exactly 10 in the morning. Now, there are also specific interpretations for the PMI reports. If the reports are above 50, that shows growth, while reports below 50 show contraction.
How PMI affects Forex News
Numbers in the foreign exchange market can change rapidly every minute. That is why drastic changes in the PMI can easily affect the forex news. If reports get too low, they can make waves in the forex market. Of course, if reports are high and positive, it can also start news in the world of forex.