Balance of payments: Balance of payments is the total revenue and expenditure of all economic transactions between a country and foreign countries within a certain period (usually within one year), and it is a record of economic exchanges between a country and other countries.
Inflation difference: inflation refers to the sustained and general increase in the overall price level. The difference of inflation at home and abroad is the dominant factor that determines the long-term trend of exchange rate. In the case that the credit currency cannot be cashed, the ratio between two countries is determined by the value they represent. If the inflation rate of a country is higher than that of other countries, its currency will tend to depreciate in the foreign exchange market; On the contrary, it will tend to appreciate.
Interest rate: the abbreviation of "interest rate" is the ratio of interest amount to loan principal in a certain period of time. We need to pay attention to the formulation of interest rate policies and interest rate fluctuations in various countries.
Market expectation: There is a huge amount of hot money in the international financial market, which is highly sensitive to the political, military and economic situation of countries all over the world. The resulting expectation dominates the flow of hot money and has a great impact on the foreign exchange market. Expectation is the most important factor that affects the foreign exchange market in the short term.
Intervention of monetary authorities: In order to maintain the exchange rate at the level expected by the government, the monetary authorities of various countries will directly intervene in the foreign exchange market and change the supply and demand situation of the foreign exchange market. Although this intervention cannot fundamentally change the long-term trend of exchange rate, it still has an important impact on the short-term trend of foreign exchange.
Here are three important economic data that can lead to changes in the exchange rate.
Unemployment rate: a sign of economic development. Rising unemployment rate means that economic growth is blocked; On the contrary, it shows that the economic development momentum is good.
Consumer price index: mainly reflects the price changes of goods or services paid by consumers. If CPI rises sharply, it will help interest rates rise in the short term, thus supporting a strong exchange rate; In the long run, it is essentially currency depreciation.
Consumer confidence index: refers to the expression of consumer desire. The rising index means that consumers are willing to spend, which is conducive to economic growth and the exchange rate is rising; On the other hand, it will be unfavorable to economic growth and the exchange rate will fall.