27/08/2026
What moves the U.S. Dollar?
The direction of the U.S. dollar is shaped by the strength of the U.S. economy and the expected path of monetary policy.
Inflation and labor market data reveal the level of price pressures and the strength of economic activity. The Federal Reserve relies on these indicators when making decisions on interest rates. As a result, every economic reading can change market expectations for the path of interest rates, with those changes then directly influencing the dollar.
When inflation remains persistent and the labor market stays resilient, markets may expect interest rates to remain high for longer, supporting the dollar. In contrast, easing inflation and weaker employment data can strengthen expectations for rate cuts and put pressure on the U.S. currency.
In this video, learn how economic data and Fed policy shape the dollar and impact financial markets.
Follow the Economic Calendar to track key data releases that may move the markets.
