10 most important forex indicators for the US dollar

The US dollar has long been the most powerful and best-selling currency in the world. This is not surprising, given the reputation and position of the United States as the world's largest economy.

 

As the world's reserve currency, a currency owned not only by central banks but also by leading financial institutions for international operations, the US dollar is a key symbol of the global economy.

 

These are some of the key macroeconomic indicators that directly or indirectly affect the US dollar.

10 most important Forex indicators for US dollars

 

GDP or gross domestic product is the most widely accepted and comprehensive indicator of a country's economic condition. It is defined as the value of all end goods and services produced within the country.

 

After World War II, the United States was the world's leading economy, with GDP at even half the world's economic output.

 

Any change in a country's GDP also affects interest rates. An increase in GDP usually leads to a sharp jump in the interest rate, which in turn contributes to an increase in foreign investment. This obviously has a positive effect on the foreign exchange market and, in this case, on the growth of the dollar.

 

If GDP falls, the opposite will happen. Interest rates will also fall sharply, as will foreign investment, which will eventually lead to a fall in the foreign exchange rate.

 

The out-of-agriculture payroll, published by the U.S. Bureau of Labor Statistics, focuses on employment figures with data on new added and lost jobs by month.

 

When more and more jobs are created, this has a positive effect on interest rates, which in turn increase foreign investment. This finally helps to strengthen the dollar and raise its rate.

 

The report, published weekly on Fridays, has a close relationship with GDP and the forex market. Since employment growth is also one of the Federal Reserve's three monetary targets, non-agricultural wage data also influence monetary policy.

 

This is a production indicator that reflects the value of orders received by manufacturers for durable goods in the United States. Here, durable goods are defined as goods whose lifespan is expected to last at least 3 years. This usually includes household appliances and equipment and does not include the transport industry.

 

Orders for durable goods are an important indicator because they focus on industrial production and reflect the economic situation in the country. After all, only in a healthy economy will the number of orders for expensive durable goods from buyers and production from companies increase.

 

It is clear that the higher the volume of orders for durable goods, this bodes well for the foreign exchange market and contributes to the further growth of the dollar. is a vital sector of any country's economy. In the United States, this data can be found in the New Home Sales Report, published by the U.S. Census Bureau, and in the Sales of Existing Homes report, the National Association of Realtors.

 

The performance is better than expected, is a good sign for the economy as a whole and helps to create a positive mood for the US dollar as well.

 

Another important indicator reflecting the state of the country's economy is personal consumption. This applies to consumer spending that occurs in the U.S. and the value of all goods and services purchased in the country.

 

The report, published by the Bureau of Economic Analysis (BEA), is of particular importance because consumer and household spending accounts for two-thirds of U.S. GDP.

 

The trade balance consists of exports and imports and is directly related to the foreign exchange market of any country. The trade balance is an important indicator of a strong economy and affects the price of its currency.

 

The U.S. Trade Balance Report is prepared by the Bureau of Economic Analysis and the U.S. Census Bureau two months together and is published five weeks after the end of the month. It shows whether there was a trade surplus, which is an increase in exports compared to imports, or a trade deficit that is reversed.

 

This is directly related to the U.S. dollar with a trade surplus indicating higher demand for U.S. goods in foreign markets, leading to higher exports. This can be a positive sign for the dollar, raising its price.Conversely, the trade deficit arises when imports increase, which puts pressure on the US dollar and leads to its decline.

 

The U.S. Bureau of Labor Statistics (BLS) is published monthly. The consumer price index, or CPI, as it is commonly called, measures the price movement of a predetermined group of consumer goods and services. The CPI report helps to compare how much goods and services are worth this month with what they cost a month or a year ago, and how fast prices are rising or falling.

 

The CPI is a leading indicator because it can be used to track price changes and reflect inflation. The U.S. Federal Reserve Board closely monitors the consumer price index to ensure price stability.

Rising prices for the consumer price index indicate a weakening of the purchasing power of the US dollar and vice versa.

 

The Industrial Manufacturing Index measures U.S. production and industrial sector activity, which includes manufacturing, mining, gas and electricity, compared to the base year. The data is collected by the U.S. Federal Reserve Board and published monthly on the 15th.

The better the indication, the higher the US dollar, and, conversely, weak data can also reduce its demand and rate.

 

Retail is a collection of retail sales. goods for the specified period of time, as well as a percentage change from the previous month. Retail sales, also known as retail sales, are compiled by the U.S. Census Bureau and the Commerce Department and published monthly on the 15th. Retail includes spending on personal consumption, which is one of the key drivers of U.S. economic growth.

 

Higher sales point to a strong economy, while weaker sales point to a weaker economy.

 

Check out: 20 types of technical indicators used by trading gurus

 

The country's current account is directly related to economic indicators, as well as affects the productivity of the currency.

 

The U.S. Current Account Index measures monthly economic transactions between U.S. accounts and accounts from other countries. This includes exported and imported goods, services and interest payments.

 

If the U.S. economy shows a trade deficit, it means that the country has spent more on imports than it earns from selling its exports, and vice versa. .

 

You need to understand the most important forex indicators that affect the US dollar if you want to trade in that currency. The above parameters are a good place to start your analysis.