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MOVERS AND SHAKERS OF THE US MARKET, A CONTINUATION

MOVERS AND SHAKERS OF THE US MARKET, A CONTINUATION.

In the previous article we began exploring macroeconomic statistics that drives the US economy and the dollar in general. Now this article will expound in broad and simple terms the remaining key economic factors that drives the US dollar.

Recall the prerequisite interpretations on the US data.

For markets involving conversion to the USD (e.g AUD/USD ,

GBP/USD , EUR/USD , XAU/USD etc) if the dollar is strengthening (‘bullish’) these markets will crash/fall. On the contrary, if the USD is weakening (‘bearish’) these markets will rise/move up.

As for the currency pairs involving conversion from the USD (such as USD/JPY,USD/CHF,USD/ZAR, USD/CNY etc), if the dollar is strengthening (‘bullish’) these markets will rise and when the dollar is weakening, these markets will crash/fall.

For the stock markets such as USCash100,US 30 and others, when the dollar is strengthening these markets will rise/move up and when the dollar is weakening these markets will crash/fall.

 

The Movers and Shakers of the US Market.

 3. FOMC (Federal Open Market Committee) Report: The FOMC consists of 12 members; 7 members of the Board of Governors of The Federal reserve System, the President of the Federal Reserve Bank of New York and 4 Presidents from the remaining 11 Federal reserve banks.

FOMC conducts 8 regularly scheduled meetings each year. In these meetings the committee reviews economic and financial conditions and determine the appropriate monetary policies to take. They assess the risk of their long-run goals of price stability and sustainable economic growth.

The FOMC report captures the agreed economic projections which triggers a chain of events that affect other short term interest rates, foreign exchange rates, long term interest rates, deposit and credit facility rate, employment rate and the prices of goods and services.

Previous Release Date: September 22nd.

Report:Tapering (‘hawkish’)

Next Release date: November 3rd Expected Report: Positive/negative

A more dovish/pessimist than expected report is considered as negative or bearish to the USD, whereas a more hawkish/favourable than expected report is considered as bullish and positive to the USD.

 

4. US Initial Jobless Claims: this is a weekly economic statistic that measures the number of individuals who applied for unemployment benefits for the first time in the past week. US Initial Jobless Claims is the most common economic data to be released, however it’s impact on the market varies from week to week.

Previous Release Date: September 23rd Value: 351K

Next Release Date: September 22nd Expected Value: 335K

A higher than expected value is considered as bearish and negative for the USD whereas a lower than expected value is considered as bullish and positive for the USD.

 

5. US Unemployment Rate: this is a monthly economic statistic that captures the proportion of the work force that is unemployed and is actively seeking for employment during the past 1 month. It’s a key indicator of the U.S economy in the previous month.

Previous Release Date: September 3rd Value: 5.2

Next Release Date: October 8th Expected Value: 5.1

A higher than expected value is considered as bearish and negative for the USD whereas a lower than expected value is considered as bullish and positive for the USD.

 

6. US Inflation Rate: the Inflation Rate also referred to as the CPI (Consumer Price Index) measure the change in the price of goods and services from the perspective of the consumer. It’s a key measure of the trend in the consumer purchasing power.

There are two variations of CPI; MoM and YoY.

Previous Release Date: September 14th Value: YoY=5.3 , MoM=0.3

Next Release Date: October 8th Expected Value: YoY=5.3, MoM=0.4

A higher than expected value is considered as bullish and positive for the USD whereas a lower than expected value is considered as bearish and negative for the USD.

 

7. US GDP Growth Rate: is a monthly economic statistic that measures the change in inflation adjusted values of all goods and services produced by the economy. It’s the gauge of the economic activity and a key indicator the heath of the economy.

Previous Release Date: September 14th Value: 6.6

Next Release Date: October 8th Expected Value: 6.6

A higher than expected value is considered as bullish and positive for the USD whereas a lower than expected value is considered as bearish and negative for the USD.

8. US 30-Year Bond Auction.

9. US Balance Of Trade.

10. US Retail Sales.

11. US Durable Goods Orders.

 

How do you check if the strength USD?

If your broker offers future indices make sure you include USDX in the list of favourite markets. USDX is an estimate of the strength of the US dollar.

If it’s not available on your MT4/MT5 account, search USDX from google on your browser.

Always keep track of the weekly economic calendar. Check it from the m Investing site using the link provided below.

References

1. Federal Reserve

2. M Investing

 

 

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