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Factors affecting the U.S. dollar

2023/2/24 19:56:13  Classification:   Participation: 7  

Fundamental factors affect bestforexrebateg the cashback forex.S. rebatemeaninginforexFederalReserveBank(Fed): the U.S. Federal Reserve Bank, referred to as the Federal Reserve, the U.S. central bank, completely independent monetary policy to ensure that the economy obtains the maximum degree of non-inflationary growthFed main policy indicators include: open market operations, the d rebatesinforexcount best forex rebate (DiscountRate The FederalOpenMarketCommittee(FOMC): the Federal Open Market Committee, the FOMC is primarily responsible for setting monetary policy, including the development of eight key interest rate adjustment announcements each year. The FOMC has 12 members, consisting of seven government officials, the president of the Federal Reserve Bank of New York, rebateinforextrading four other members selected for one-year terms from the presidents of the other 11 local Federal Reserve BanksInterestRates: Interest rates, or FedFundsRate, the federal funds rate, are the most important interest rate indicator and the overnight lending rate at which savings institutions lend to each otherWhen the Fed wants to send a clear signal to the market about monetary policy, it announces a new Each time such an announcement is made, it will cause major turmoil in the stock, bond and money marketsDiscountRate: The discount rate is the interest rate charged by the Fed when commercial banks apply for loans from the Fed for reserve and other emergencies Although this is a symbolic interest rate indicator, its change will also express a strong policy signalThe discount rate is generally less than the federal funds rate of 30- yearTreasuryBond: 30-year Treasury bill, also called long-term bond, is the most important indicator of inflation in the market. However, with the implementation of the U.S. Treasurys program of borrowing new debt to pay off old debt, the issuance of the 30-year Treasury note began to shrink, and the 30-year Treasury note began to give way to the 10-year Treasury note as a benchmark. Depending on the stage of the economic cycle, some economic indicators have different effects on the dollar: when inflation is not a threat to the economy, strong economic indicators will support the dollar exchange rate; when inflation is a clear threat to the economy, strong economic indicators will depress the dollar exchange rate, one of the means is to sell bonds as a benchmark for asset levels, long-term bonds are generally affected by the global capital flows due to the The impact of financial or political turmoil in emerging markets will push up the dollar assets, at this time, the dollar assets as a hedge, indirectly will push up the dollar exchange rate 3-monthEurodollarDeposits:3-month EurodollarDeposits Eurodollar refers to the dollar deposits deposited in foreign banks in the United States such as: the Japanese yen deposits deposited in foreign banks in Japan called For example, in the case of USD/JPY, the larger the positive difference between Eurodollar and Eurodollar deposits, the more likely it is that the exchange rate of USD/JPY will be supported by 10-yearTreasuryNote: 10-year short-term treasury bills. When we compare yields between countries for the same type of bond, we generally use 10-year short-term Treasury notesThe difference in yields between bonds affects the exchange rateIf the yield on U.S. dollar assets is high, the exchange rate will push up the dollarTreasury:TreasuryThe U.S. Treasury is responsible for issuing government bonds and setting the fiscal budgetThe Treasury has no say in monetary policy, but its comments on the dollar may have a greater impact on the dollar exchange rate EconomicData:Economic data released by the U.S. The most important economic data include: labor force reports (payrolls, unemployment rate and average hourly earnings), CPI (ConsumerPriceIndex), PPI, GDP (grossdomesticproduct), international trade levels, industrial production, housing, and the US dollar. International trade levels, industrial production, housing starts, housing permits and consumer confidence StockMarket: The three main stock market indices are: DowJonesIndustrialsIndex (Dow), S&P500 (S&P 500) and NASDAQ (NASDAQ) where Since the mid-1990s, the Dow Jones Industrials Index has had a strong positive correlation with the U.S. dollar (because of foreign investors purchases of U.S. assets). The three main factors that affect the Dow Jones Industrials Index are: 1) company revenues, both expected and actual; 2) the expected level of interest rates; and 3) global political and economic conditions. CrossRateEffect: The impact of cross rates on the rise and fall of the crossover will also affect the dollar exchange rate FedFundsRateFuturesContract: Federal funds rate futures contract This contract value shows the markets expectation of the federal funds rate (and the expiration date of the contract), is the most direct measure of the Feds policy 3- monthEurodollarFuturesContract:MarchEurodollarFuturesContractLike the federal funds rate futures contract, the MarchEurodollarFuturesContract also has an impact on the MarchEurodollarDepositFor example, the spread between the MarchEurodollarFuturesContract and the MarchEurodollarFuturesContract is the fundamental change that determines the future movement of USD/JPY

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