As a Forex trader, you must be able to interpret global economic events and translate them into wise decisions in your choice of currencies. This has been made easier for you through Forex economic calendars which contain information about events that impact world currencies.

How do you use these calendars for your trading activities?
Before you begin trading, you should subscribe to several online resources that contain these calendars. They are accurate and constantly updated, and you can even refer to archives of economic activities in the past. Online economic calendars are way more convenient than following the Forex markets through the TV or newspapers.

Online economic calendars are usually divided in columns, starting from the date, time, source, meaning countries, a description of reports, and the forecast on how the report will affect currency, and finally the numbers and percentages of previous economic reports.
Once you find a suitable online economic calendar, the first thing you will notice is that it contains activities that occur in all the major currency markets. So if you are trading in the USD, GBP or JPY in any currency pair, you need to keep an eye on news coming from the United States, Britain and the EU, and Japan respectively. The economic activities of these countries will directly affect your currency trading strategy.

This does not mean that you ignore information coming from other countries. Remember that currency crosses do affect, and are affected by, the majors. This means that you generally have to be well informed about the economic events of other countries active in the Forex markets. An example of this is if a global banking organization based, say, in Germany (EUR currency) faces problems in New Zealand (NZD), the currencies, in whichever pairs, will be negatively affected.
The sort of information available on economic calendars is mainly reports from Forex participants. Economic events are of very many different kinds, so you will find reports on consumer confidence, employment trends, building approvals and infrastructure and vehicle production, among many other reports. This gives you an idea about the kind of economic events that affect the Forex markets. Most online economic calendars only provide the titles of the reports, so if you want more details, you can now turn to the newspapers or search for them online.

When you come to the columns of “Forecast” and “Previous”, you will find that in many cases, the Forecast column is not filled, but the previous column almost always has a number or a percentage. These 2 columns can help you predict or at least understand how the results of the economic reports will have on the currencies. For example, if the building approvals percentage in the previous column is about 3%, and the one on the Forecast column is 3.2%, first look at the date column. If the date is maybe 2 days from now, it means that the report on building approvals is not out yet, but the prediction, or Forecast, shows that it is expected to rise from the previous percentage. Now, if the building approvals report is coming from Australia, the currencies interacting with the Australian Dollar will be affected positively.
This is only a basic introduction to how you can use economic events and calendars to understand currency movements. Use the above as a starting point to improving your Forex trading strategy.