Other Factors That Move FX Rates - Pt 2
July 25th, 2007 | by admin |The other types of US economic data that move FX rates are the Producer Indices and Consumer Indices. The Producer Price Index, Purchasing Manager Index and Industrial Production Index all give an indication of the cost of producing goods in the US. A rise in the indices is indicative of a rise in the cost of producing goods. Such an increase results in higher inflation which may cause the Federal Reserve to adjust interest rates.
Most of us are probably familiar with the Consumer Price Index, Consumer Confidence Index and Retail Sales Index. The Consumer Price Index (CPI) measures how much a standard basket of goods costs to consumers. A rise in the CPI is associated with increased inflation. The Consumer Confidence Index (CCI) measures how confident consumers are in the US economy. A higher CCI is associated with an improving economy and hence a stronger US dollar. Finally, Retail Sales Index broadly measure consumer spending in goods and services. Higher retail sales would indicate confidence in the US economy as well.
I’ve listed a number of websites below where you can get a calendar listing the release of economic data for the weeks and months ahead.
1. http://www.bloomberg.com/markets/ecalendar/index.html
