Trusted by over 15 Million Traders
The Most Awarded Broker
for a Reason
CATEGORIES
News
- 【XM Group】--Gold Analysis: Gold Eyes $2,800 as Fed Decision Looms
- 【XM Decision Analysis】--Silver Forecast: Silver Continues to See Overhead Pressu
- 【XM Group】--Gold Analysis: Retreats to $2,884
- 【XM Group】--USD/MXN Analysis: Trump Thunderbolt Causes Surge Amidst New Reality
- 【XM Forex】--USD/JPY Forex Signal: Drops Amid Safety Demand
market news
CPI and retail sales data are available this week. Can the US dollar index get rid of the "fall curse"?
Wonderful introduction:
Optimism is the line of egrets that are straight up to the blue sky, optimism is the ten thousand white sails beside the sunken boat, optimism is the lush grass that blows with the wind on the head of the parrot island, optimism is the falling red spots that turn into spring mud to protect the flowers.
Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Official Website]: CPI and retail sales data will appear this week. Can the US dollar index get rid of it? "The curse of falling"?" Hope it will be helpful to you! The original content is as follows:
On Monday (August 11), the US dollar index fell slightly by 0.09% during the Asian and European period, and the price was below the 10, 20 and 50-day moving averages. The medium-term trend was suppressed. Currently trading at 98.14, below the 100 integer mark. The fluctuations in the US dollar index have always been closely linked to the market's assessment of the attractiveness of US dollar assets. At the same time, the US dollar index is facing multiple impacts from policy expectations and economic data, as well as market sentiment.
The Fed's expectation of interest rate cuts pressured the US dollar index
The US dollar index reflects the strength of the US dollar relative to a basket of currencies, and behind it is the willingness of global capital to allocate US dollar assets. The logical chain of "interest rate-attraction-capital flow" clearly shows the transmission path of policy expectations to the US dollar index.
The market's expectations of Fed policy are the fundamental variables that affect the US dollar index. Since the market currently expects the Federal Reserve to cut interest rates multiple times this year, "the market currently expects the Federal Reserve to cut interest rates at least twice this year." Michael Ferroly, chief American economist at JPMorgan Chase, believes that "for Powell, the risk management considerations at the next meeting may not only be to balance employment and inflation risks. We now believe that the path with the least resistance is to advance the next 25 basis point rate cut to the September meeting."
If the Fed cuts interest rates as scheduled, the ECB, by contrast, seems to have ended its long rate cut cycle. At the next meeting on September 10, the probability of deposit rates remaining at 2.00% is 86.3%, indicating that the ECB now believes a neutral monetary policy stance is appropriate after several rate cuts earlier this year.
This may significantly reduce the relative attractiveness of the US dollar, and thus "reduce the USThe demand for dollar-denominated assets. Capital outflows from dollar assets directly lead to selling pressure on the foreign exchange market, pushing the dollar index down. Therefore, the heating of the Fed's interest rate cut expectations has become the "source" factor affecting the dollar index.
The main tone of the dollar under risk appetite and policy difficulties
Signs of the stock market continue to soar. Apollo chief economist Torsten Slow's recent research pointed out that Nvidia, as the largest stock in the S&P 500 with the largest market capitalization, reached its highest level since Microsoft in 1999. Initial public offerings (IPOs) such as Firefly Aerospace (FLY) continued to soar on the first day of listing, and cryptocurrencies and cryptocurrencies-related stocks also ushered in a new rebound.
"Reflects the continued warming of market risk appetite. In an environment with rising risk appetite, capital is more inclined to flow into high-yield risk assets rather than the US dollar, which mainly uses hedge attributes. This sentimental factor will form a synergy with policy expectations and suppress the US dollar index. The potential trend of the US dollar index can be summarized as "short-term pressure is the main factor, and the long-term depend on policy balance."
Economic data further revised policy expectations
UBS senior economist Alan Detmester pointed out that the July CPI report released on Tuesday (August 11) is expected to bring an update on how tariffs affect inflation.
Wall Street economists expect overall inflation to rise 2.8% year-on-year in July, up from 2.7% in June. "The CPI is expected to rise by 2.8% in July" "Tariffs are driving inflation to accelerate, and the July data will start an upward trend that lasts for several months. Detmeister predicts that the core CPI will rise from 2.9% in June to 3.5% at the end of the year." If inflation exceeds expectations, it may force the Federal Reserve to re-evaluate the pace of interest rate cuts, but the current mainstream market expectations are still biased towards "rate cuts first". Therefore, the inflation data released later is more likely to be interpreted as "increasing the necessity of interest rate cuts", further consolidating the pressure logic of the US dollar index.
On Friday (August 15), investors will obtain the latest information on consumer spending status through July retail sales data. Economists expect overall retail sales to rise by 0.5% in July, slightly lower than the 0.6% gain the previous month. But a large portion of the increase is expected to xmtraders.come from car sales, senior US economist Michael Reed, wrote in a note to clients. In the retail sales control group, which excludes several volatile categories such as automobiles and includes quarterly gross domestic product (GDP) data), Reed expects sales to rise only 0.1%. “We expect other data to behave in moderation besides car sales,” Reed wrote.
In summary, against the backdrop of the Fed's expectation of interest rate cuts and the heating of risk appetite, the US dollar index is more likely to face continuous pressure in the short term, and the intensity of this trend will be determined by the further correction of policy expectations by data such as CPI and retail sales in July.
The above content is all about "[XM Forex Official Website]: CPI and retail sales data appear this week. Can the US dollar index get rid of the "falling curse"?", which was carefully xmtraders.compiled and edited by the editor of XM Forex. I hope it will be helpful to your trading! Thanks for the support!
Share, just as simple as a gust of wind can bring refreshment, just as pure as a flower can bring fragrance. The dusty heart gradually opened, and I learned to share, sharing is actually so simple.
Disclaimers: XM Group only provides execution services and access permissions for online trading platforms, and allows individuals to view and/or use the website or the content provided on the website, but has no intention of making any changes or extensions, nor will it change or extend its services and access permissions. All access and usage permissions will be subject to the following terms and conditions: (i) Terms and conditions; (ii) Risk warning; And (iii) a complete disclaimer. Please note that all information provided on the website is for general informational purposes only. In addition, the content of all XM online trading platforms does not constitute, and cannot be used for any unauthorized financial market trading invitations and/or invitations. Financial market transactions pose significant risks to your investment capital.
All materials published on online trading platforms are only intended for educational/informational purposes and do not include or should be considered for financial, investment tax, or trading related consulting and advice, or transaction price records, or any financial product or non invitation related trading offers or invitations.
All content provided by XM and third-party suppliers on this website, including opinions, news, research, analysis, prices, other information, and third-party website links, remains unchanged and is provided as general market commentary rather than investment advice. All materials published on online trading platforms are only for educational/informational purposes and do not include or should be considered as applicable to financial, investment tax, or trading related advice and recommendations, or transaction price records, or any financial product or non invitation related financial offers or invitations. Please ensure that you have read and fully understood the information on XM's non independent investment research tips and risk warnings. For more details, please click here