Indicators that most influence the USD

Indicators that most influence the dollars value:

1. Employment Report

Importance: Highest.
Published by: Bureau of Labor Statistics, U.S. Department of Labor.
Frequency: Monthly.
Release Time: First Friday of the month at 8:30 ET

Market Reaction:

EventFixed IncomeEquitiesDollar
Payroll Employment UpBond Market DownStock Market UpDollar Up
Unemployment Rate UpBond Market UpStock Market DownDollar Down
Payroll Employment DownBond Market UpStock Market DownDollar Down
Unemployment Rate DownBond Market DownStock Market UpDollar Up

Employment news stongly impacts the dollar. A positive jobs report could drive interest rates higher, making the dollar interesting to foreign investors and increasing demand for the greenback. A weak jobs report is bearish for the stock market and puts a downward pressure on interest rates, both of which make the dollar less appealing to foreign investors.

2. International Trade Report

Importance: Moderate
Volatility: Moderate
Source: The Census Bureau and the Bureau of Economic Analysis of the Department of Commerce.
Release Time: 8:30 ET around the 20th of the month.
Coverage: Two months prior

This report reflects trends in the overall trade balance. Export data reflect a strengthening competitive position at home and may also indicate that growing economies abroad are aiding U.S. growth. Imports reflect domestic demand, however this report is relatively late among consumption indicators. The volatility in the monthly trade balance can impact GDP forecasts. The Trade Report gives an early indication of the net export performance each quarter, a somewhat volatile component of GDP.

Trade Balance UpStock Market UpDollar Up
Trade Balance DownStock Market DownDollar Down

An improvement in the trade balance is favorable for the dollar – an increase in demand for US goods and services from foreigners will mean more dollars needed by the foreigners to pay for the US products and services.

A worsening trade deficit is bearish for the dollar – in order to buy foreign goods and services Americans have to sell dollars to buy the goods in the local currency.

3. Gross Domestic Product

Release Date: Last Day of the Quarter
Release Time: 8:30AM EST
Coverage: Previous Quarter
Released By: Commerce Department

GDP represents the total market value of all final goods and services produced in a country in a given year. It includes consumption, government purchases, investments, and the trade balance (exports minus imports). It is the broadest indicator of the economic output and growth, and probably the most important indicator of the economic wellbeing of a country.

EventFixed IncomeEquitiesDollar
GDP UpBond Market DownStock Market UpDollar Up
GDP DownBond Market UpStock Market DownDollar Down

A strong US economy reflected in the GDP report is bullish for the stock market and could drive interest rates higher. Foreign investors will be attracted to opportunities in the stock market and also by the interest rates offered by higher yielding Treasury bills and bonds and these factors will increase demand for the dollar.