Central bank rate changes are the most powerful driver of currency valuation. Hikes strengthen a currency; cuts weaken it.
Inflation data shapes rate expectations. Higher inflation pressures central banks toward tightening, supporting the currency.
Labor market strength signals economic health. Strong jobs data supports the currency; weak data pressures it.
Gross Domestic Product measures overall economic output. Growth supports the currency; contraction weighs on it.
Forward guidance and tone from central banks move markets. Hawkish language strengthens; dovish weakens.
PMI and industrial output reflect economic momentum. Readings above 50 indicate expansion; below 50 signal contraction.