MCQs on News and Events Impacting Forex
1. What type of news is most likely to impact Forex markets?
A) Celebrity gossip
B) Economic data releases
C) Weather forecasts
D) Sports events
Answer: B) Economic data releases
2. Which economic report is considered a key indicator for Forex trading?
A) Quarterly earnings report
B) Gross Domestic Product (GDP)
C) Company press releases
D) Movie reviews
Answer: B) Gross Domestic Product (GDP)
3. What does an interest rate hike by a central bank generally do to the currency value?
A) Decreases its value
B) Increases its value
C) Has no effect
D) Only affects stock prices
Answer: B) Increases its value
4. How can political events influence the Forex market?
A) They have no impact
B) They can cause uncertainty and volatility
C) They only affect commodities
D) They are only important during elections
Answer: B) They can cause uncertainty and volatility
5. What is “economic news” in the context of Forex?
A) News about company profits
B) News related to a country’s economic indicators
C) News about sports events
D) News on celebrity lifestyles
Answer: B) News related to a country’s economic indicators
6. Which of the following events might lead to a “risk-off” sentiment in Forex trading?
A) Positive economic data
B) Political instability
C) Central bank interest rate cuts
D) Strong corporate earnings
Answer: B) Political instability
7. What is the effect of high inflation news on a currency?
A) It usually strengthens the currency
B) It usually weakens the currency
C) It has no impact
D) It only affects bond markets
Answer: B) It usually weakens the currency
8. Which news event typically causes immediate movement in the Forex market?
A) Quarterly company meetings
B) Economic indicators release (e.g., non-farm payrolls)
C) Social media trends
D) Fashion shows
Answer: B) Economic indicators release (e.g., non-farm payrolls)
9. What role do central banks play in Forex trading?
A) They regulate the stock market only
B) They influence currency values through monetary policy
C) They only impact local markets
D) They manage commodities
Answer: B) They influence currency values through monetary policy
10. Which report would typically cause the most volatility in the Forex market?
A) A report on tourism
B) A government employment report
C) A company sales report
D) A weather report
Answer: B) A government employment report
11. What is meant by the term “economic calendar” in Forex trading?
A) A calendar that shows holidays
B) A schedule of upcoming economic events and reports
C) A calendar of birthdays
D) A schedule of social events
Answer: B) A schedule of upcoming economic events and reports
12. How can natural disasters affect the Forex market?
A) They have no impact
B) They can disrupt economic activity and lead to currency depreciation
C) They only affect insurance stocks
D) They create buying opportunities in Forex
Answer: B) They can disrupt economic activity and lead to currency depreciation
13. What is “geopolitical risk”?
A) The risk associated with weather changes
B) The risk associated with political and economic instability in a region
C) The risk related to company-specific events
D) The risk of technological failures
Answer: B) The risk associated with political and economic instability in a region
14. Why is it important for Forex traders to stay informed about news and events?
A) It helps them to predict lottery numbers
B) It aids in making informed trading decisions
C) It is not necessary
D) It only affects long-term investors
Answer: B) It aids in making informed trading decisions
15. What impact does a strong jobs report typically have on a country’s currency?
A) It weakens the currency
B) It has no effect
C) It strengthens the currency
D) It only affects stocks
Answer: C) It strengthens the currency