Investors should know the dollar index when speculating in foreign exchange. Even indicators that comprehensively reflect the general situation of the US dollar exchange rate in China's foreign exchange market are used to measure the degree of exchange rate changes of the US dollar against various currencies. This indirectly reflects the changes in American export competitiveness and imports. What are the factors that affect the US dollar index?

The main factors affecting the US dollar index

1, US federal funds benchmark interest rate

The rise and fall of the benchmark interest rate of the US federal funds has significantly affected the trend of the US dollar index. If the US federal funds benchmark interest rate rises, the dollar will show signs of strengthening; On the contrary, the dollar will weaken. Adjusting the benchmark interest rate of the federal funds is actually a good way to control the strength of the dollar. In fact, the biggest difference between a strong dollar and a weak dollar lies in the difference in the benchmark interest rate of the federal funds. The government can influence the dollar index by raising or lowering the benchmark interest rate to serve the domestic economy.

2. Discount rate

When commercial banks apply for loans from the Federal Reserve in an emergency, the Federal Reserve will charge a certain interest rate, that is, the discount rate. Although the discount rate is not the benchmark interest rate of federal funds, it is an obvious symbolic interest rate indicator, and its change reflects the direction of policy signals. The impact of the increase in discount rate on the US dollar index is similar to that of federal funds, which can not be ignored when judging the trend of the US dollar index.

3. Long-term bonds

The 30-year national debt, called long-term bond, is the most important indicator to measure market inflation. In the case of inflation, investors' investment demand is expected to increase, and the corresponding 30-year national debt will inevitably fall to improve the yield. The rise in the yield of government bonds is the pressure of the US dollar index. The increase of 30-year treasury bonds will restrain the dollar index. Instead, it will support the US dollar index.

4. Important economic data of the United States

Including gross domestic product, labor force report, consumer price index, producer price index and housing construction. If the economic data continues to improve, the federal government may raise interest rates. After raising interest rates, the US dollar index will strengthen, and when the economic data is not good, it will cut interest rates, so the suppression of the US dollar index cannot be ignored.