Norges Bank

Staff Memo

Which key figures move the foreign exchange market?

Alexander Flatner and Hong Xu
Staff Memo

A number of international studies find that financial prices are affected by announcements of economic news. Prices change when key figures and other economic news affect market participants' view of the current state of the economy and future prospects. The effect of the news on financial prices will depend on factors such as the magnitude of the surprise relative to market expectations. In addition, the effect is assumed to vary over time and across assets.

The krone exchange rate is a financial variable that can react strongly and rapidly to new economic key figures. Information from our market contacts indicates, however, that some key figures are regarded as more important than others. This paper identifies these figures, compares with the effects on other currency crosses and examines how the focus on some Norwegian key figures has changed over time.

Staff Memos present reports and documentation written by staff members and affiliates of Norges Bank, the central bank of Norway. Views and conclusions expressed in Staff Memos should not be taken to represent the views of Norges Bank.

ISSN 1504-2596 (online)

Published 26 August 2015 15:42
Published 26 August 2015 15:42