What are the main factors affecting the exchange rate of European and American currencies?-Trading Academy

. Dollar and euro related transactions account for a very large proportion in foreign exchange, and the price fluctuation of dollar and euro also leads to the change of currency to trade market. What are the factors that affect the exchange rate of US dollar? , The data it publishes directly guides the interest rate change of the US dollar, thus causing the change of the US dollar index. That's why the Fed's interest rate hike has recently become the focus of public concern. It can directly determine the general direction of the US dollar exchange rate. 2. Economic growth situation

If the economic growth is good, it can attract international funds to the United States and obtain good investment returns. The demand for the dollar in the financial market will increase, which will promote the appreciation of the dollar relative to other currencies and the dollar index to rise. Data analysis shows that when U.S. GDP growth is good, it indicates that the economy is in good condition. At this time, the U.S. dollar index is rising. The first economic boom took place from 1983 to 1985, when the Reagan administration pursued the economic concept of supply school, during which the average annual growth rate of U.S. GDP was 5.37%, which was the rising period of the U.S. dollar index. The second boom took place from 1991 to 1999, when the Internet economy was booming. The U.S. economy continued to grow for more than 120 months, with an average annual GDP growth of 3.84%, while the average CPI was only 2.81%. During this period, the U.S. dollar strengthened twice. 3. Speech of the U.S. Treasury Department, The speech of the Ministry of finance has often become the focus of people's discussion, which is also a guiding basis for the trend of the US dollar exchange rate. 4. U.S. bonds

although bonds have no direct relationship with the exchange rate of the U.S. dollar, But because inflation can affect the price of bonds, it may affect the degree of pressure on the dollar to some extent. 5. Stock index

from the perspective of historical data, Several stock indexes led by Dow Jones industrial index are directly related to the exchange rate of US dollar. 6. Commodity price and euro exchange rate

Most of the commodities in the international commodity market are denominated in US dollars, so the commodity price is negatively correlated with the US dollar index.

. , Including the monthly non-agricultural data and consumer confidence index, it is also a measure of the value of the dollar.

these factors are important indicators that affect the sharp decline of the US dollar exchange rate. Mastering the changes of these factors can basically judge the change of the US dollar exchange rate trend, which is the direction that the currencies related to us dollar investment need to focus on.

2. What are the influencing factors of euro exchange rate? The euro zone is composed of 12 countries, Germany, France, Italy, Spain, the Netherlands, Belgium, Austria, Finland, Portugal, Ireland, Luxembourg and Greece, all of which use euro as currency 1. European Central Bank (ECB): monetary policy of the European Central Bank. The ECB meets every two weeks on Thursday to set new interest rate targets. After the first meeting of each month, the ECB will issue a briefing on monetary policy and economic outlook as a whole.

2. Interest rate. It is the main short-term exchange rate used by the central bank to adjust the liquidity of the money market. The spread between this interest rate and the US federal funds rate is one of the factors determining the EUR / USD exchange rate.

3. Economic data: economic data. The most important economic data comes from Germany, the largest economy in the eurozone. The main data include: GDP, inflation data (CPI or hcpi), industrial production and unemployment rate. According to the stability and growth pact, the fiscal deficit of each member country must be controlled below 3% of GDP, and each country must have the goal of further reducing the deficit 4. Cross rate effect: cross rate effect. As with the US dollar, the exchange rate of the euro will be affected by the cross trade.
5. Political factors: compared with other exchange rates, the EUR/USD is most vulnerable to political factors, such as domestic factors in France, Germany or Italy. Political and financial instability in the former Soviet Union would also affect the euro, as a considerable number of German investors invested in Russia.