The Fed beige book is an interesting release. It is full of little predictive goodies but is often ignored by traders. I suspect part of that is due to the fact that the beige book is full of anecdotal information and is therefore somewhat difficult to quantify. However forex traders should care about the release (and many do) because the Fed uses this same information in its decision making process.
The beige book comes out two weeks before the FOMC meeting and contains information from each of its districts in the U.S. This information is gathered from business leaders, economic experts, market experts, loan officers, bank managers, etc. and is summarized and released to the public. If you want to know some of what the Fed knows, read this report. It provides a lot of insight. In the video, I will run through two different case examples when a major change in the tone of the report created a significant shift in the risk environment and subsequent price movements in the forex.
Fortunately, the report is easy to find and free to anyone with an internet connection. You can get it by following this link. The tone of the report due this week is likely to be a key indication of the action taken by the Fed in the first week of August. Equities are likely to be the most sensitive to the report and therefore traders should be watching the JPY like a hawk (pun intended) for the next several days.
Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts. Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary and does not constitute investment advice. Forex Capital Markets LLC. will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.