Forex market traders use macroeconomic indicators in their work, that is, indicators of the state of the economy displayed in the economic calendar. And the state of the economy of any country directly affects the exchange rate of the national currency. The most important macroeconomic indicator is gross domestic product (GDP). Why is GDP indicator important to a trader? The size of the economy has an impact on the production, consumption and import of goods. Understanding which countries lead in terms of GDP plays a key role in fundamental analysis. The fate of the economies of the top 10 countries will certainly be reflected at the global level.
Not all currencies on this list are used for international payments. For example, China's GDP growth does not always impact the RMB due to low international circulation. However, China's GDP decline could impact other currencies including the Australian dollar, New Zealand dollar, US dollar and euro. For a trader, the dynamics of GDP is more important than its size. The active development of the economy strengthens its currency. It is also important that actual growth matches expectations.
An unexpected change in GDP can cause significant movements in the exchange rate. The larger the economy, the more the market reacts to the slightest deviations. For example, a slight overshoot in US GDP growth could strengthen the dollar.
With the Russian economy, it would take a significant beating of expectations to influence the exchange rate. GDP, as well as rates, inflation and unemployment, affect the exchange rate of the national currency.