What triggers movements in the dollar’s exchange rate?

To try to better predict future movements in the dollar’s exchange rate, we look at what has triggered them in the past: The Federal Reserve’s monetary policy (interest rates, liquidity) relative to that of other countries? The US external deficit and debt? The level of risk aversion? Variations in central banks’ foreign exchange reserves? O ver the period 2000-2019 , we find that there has been a link between changes in the dollar’s exchange rate and: The dollar-euro yield spread; The ratio of the US to euro-zone monetary bases; The US trade balance. This points to a relative ly stab le dollar going forward , as the first two factors will lead it to appreciate and the third to depreciate.