The answer to your question has to be a long one because there are many factors involved when trading on the basis of news releases. Consequently, I will post one part of the answer now and add the second part after couple of days, and the third and final part just before the weekend.
Remember that the currency market is made up of a complex set of relationships between different currencies. Some may not be so obvious to the casual trader, an example of this would be currencies which correlate unexpectedly with other currencies, where one may end up zeroing out any potential profits, or doubling risks.
I mention this because a good trader should keep this fact in mind whenever an attempt is made to analyze the market. So the implication here is that in order to make a sound analysis regarding the repercussions of news releases, a trader has to be informed about other currency pairs, aside from their currency of interest period
Most traders agree that there are eight currencies, which a savvy trader should keep tabs on. Note that these are just the most significant, and represent the minimum basket of currencies involved in a competent analysis. These currencies are the Japanese yen, the US dollar, the Swiss franc, the Euro, the Australian dollar, the New Zealand dollar, the British pound and the Canadian dollar.
The savvy trader must always be on top of developments in use regarding these currencies. It is important to note that aside from knowing the date of when important news is going to be released, the difference between the actual result and the whisper values or numbers is extremely important in forecasting how the currencies will react to the actual news. Whisper values are merely estimated or expected values which are simply the numbers which everyone expected to appear.
In the next installment of this answer, I will cover the important news and figures to monitor, and when they usually appear.
In the second part of the series about trading news, which by the way is a bit late because it skipped my mind that I would be monitoring the G 20 this week, we will look at the important times where you should be keeping your ears glued to the news reports. All the times mentioned here are Eastern Standard Time.