Cross Rate Effect

The dollar's value against one currency is sometimes impacted by another currency pair (exchange rate) that may not involve the dollar.

To illustrate, a sharp rise in the yen against the euro (falling EUR/JPY) could cause a general decline in the euro, including a fall in EUR/USD. 7WBN85MKED7N

Stock Market

The three major stock indices are the Dow Jones Industrials Index (Dow), S&P 500, and NASDAQ. The Dow is the most influential index on the dollar.

Since the mid-1990s, the index has shown a strong positive correlation with the greenback as foreign investors purchased US equities.

Three major forces affect the Dow: 1) Corporate earnings, forecast and actual; 2) Interest rate expectations and; 3) Global considerations. Consequently, these factors channel their way through the dollar

Economic Data

The most important economic data items released in the US are:

labor report (payrolls, unemployment rate and average hourly earnings), CPI, PPI, GDP, international trade, ECI, NAPM, productivity, industrial production, housing starts, housing permits and consumer confidence.