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The dollar index maintains low fluctuations, focusing on this week's G20 Finance Ministers' Meeting
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Platform]: The US dollar index maintains a low fluctuation, focusing on this week's G20 Finance Ministers' Meeting". Hope it will be helpful to you! The original content is as follows:
On the Asian session on Monday, the US dollar index was sluggish, the economic data this week was relatively light, and the Easter holiday will also lead to the market closure. Focus on the S&P Global xmtraders.comprehensive PMI initial value, new home sales announced on Wednesday, durable goods orders, initial jobless claims and existing home sales, and the final value of the University of Michigan Consumer Confidence Index. After Powell's speech last Wednesday, the market will also closely monitor the statements of Fed officials such as Kashkali and Goulsby.
Analysis of major currency trends
Dollar: The dollar index remains sluggish, and despite hawkish remarks by Fed Chairman Jerome Powell, uncertainty in U.S. President Donald Trump's trade policy has weakened the dollar. Powell said last Wednesday that the Fed could keep the benchmark interest rate unchanged and wait for a clearer signal before considering any policy adjustments. Meanwhile, Trump's capricious tariff announcements have weakened investors' confidence in U.S. economic growth and dragged the dollar to a two-year low, opening a new week. According to the daily chart, the US dollar index has emerged from the high point of 110.1699, falling below three important moving averages, namely MA55, MA14 and MA200. The price has hit a low of 99.0150, forming a technical resonance with the 240-minute chart. The RSI indicator has fallen to 27.3184, entering the oversold area, suggesting a possible technical rebound. However, the MACD indicator is still in a dead cross state, with the DIFF value of -1.4124 and the DEA value of -1.1281, indicating that the action energy in the medium term is still strong. In addition, the price has fallen below the important support level of 100.2000 and converted toNew resistance area.
1. Economic concerns remain, and gold is favored by funds
Last week, the price of xmtraders.comEX gold rose 2.65% to US$3341.30/ounce, and Shanghai gold owners rose 4.45% to 791.02 yuan/gram. In terms of data, the overall business condition index of New York's manufacturing industry rose 11.9 points to -8.1, better than the expected value -13.5. Despite ease, manufacturing activity shrank for the second consecutive month, and the future order confidence index plummeted to its lowest level since 2001, showing concerns about a future recession. In terms of interest rate cuts, the latest CME "Federal Observation" data shows that the probability of keeping interest rates unchanged in May is 86.1%, the probability of cutting interest rates by 25 basis points is 13.9%, the probability of keeping interest rates unchanged by June is 39.6%, the probability of cutting interest rates by 25 basis points is 52.8%, and the probability of cutting interest rates by 50 basis points is 7.5%. Overall, economic data performed poorly and market funds continued to flow into the gold market.
2. Republican lawmakers "reverse" bombarded Trump: The president has no right to fire the Federal Reserve Chairman
According to the Financial Times, John Kennedy, a Republican senator in Louisiana and a member of the Senate Banking xmtraders.committee, fiercely criticized US President Trump's attack on Federal Reserve Chairman Powell on Sunday local time, saying that no president has the right to fire the Federal Reserve Chairman. "I don't think the president, any president, has the right to remove the Fed chairman," Kennedy said on NBC. "I think the Fed should be independent." Earlier, Trump said he believed he had the right to fire Powell, and he told reporters in the Oval Office last Thursday: "If I want him to step down, he will step down soon, believe me." Kennedy defended the focus of the Fed's control of inflation on Sunday, saying: "My experience with Powell told me that he fights."Tigerblood. He will do what he thinks is right, he won't be in the history of allowing inflation to be crazy like the March hare, he will take what he thinks must be done. ”
3. Fed Goulsby warned: questioning independence will damage the credibility of the Federal Reserve
U.S. Chicago Fed Chairman Goulsby said on Sunday local time that he hopes the United States will not move towards an environment in which the Federal Reserve's ability to formulate monetary policies independently of political pressure is questioned. In response to a xmtraders.comment on US President Trump's xmtraders.comment on Fed Chairman Powell last week, Gusby said economists agree that central banks that have the ability to implement monetary policy without political intervention will have a better impact on the economy. However, for central banks that do not have such freedom in this regard, "inflation is higher, economic growth is slower, and job markets are worse." "I strongly hope that we don't push ourselves to an environment where monetary independence is questioned, because that will damage the credibility of the Federal Reserve. ”
4. Tariff policy and negative factors impact the US tourism industry. Tourists to the United States dropped by nearly 12% in March.
The US tourism industry has maintained a huge trade surplus with other countries and regions in the world. Data from the American Tourism Association shows that the revenue of US tourism industry in 2024 was about US$1.3 trillion, creating about 15 million jobs for the United States. However, due to the impact of the US government's tariff policies, as well as the negative remarks and increasingly strictness of the US politicians' negative remarks on other countries. The U.S. tourism industry is facing challenges due to the impact of Georgia's border and immigration policies. The Washington Post reported that the number of foreign tourists to the United States fell by nearly 12% year-on-year in March. Due to the sharp decline in the number of tourists to the United States, the American Tourism Association predicts that the U.S. tourism industry revenue may drop by $72 billion in 2025, and industries such as hotels, aviation, and catering will face a chain reaction.
5. Surveys show that Trump's approval rating on economic issues has fallen to the lowest level of his presidential career. h3>
On April 19, local time, according to the latest national economic survey of xmtraders.comBC, US President Trump's approval rating on economic issues hit a new low in his career as he caused widespread dissatisfaction with the way he handles tariffs, inflation and government spending. It is reported that 49% of respondents believe that the US economy will deteriorate in the next year. The survey found that 44% of respondents recognized Trump's handling of Trump, and 51% of respondents expressed opposition. On economic issues, Trump's support 43% and 55% opposition.
Institutional View
1. Institutions: If Trump attacks Powell, the U.S. economy may fall into recession. EvercoreISI analysts said that any action by the Trump administration attempts to fire Fed Chairman Powell "will lead to a surge in stagflation trading," but they believe that the implementation of such action is "unlikely". It can be seen from the trends in bond and foreign exchange markets that the market has alreadyLosing confidence in Trump's economic policies. However, there is no sign that the market has lost confidence in the Fed, as indicators of expected inflation remain at a low level. Any move that undermines the independence of the Fed will lead to a xmtraders.comprehensive rise in long-term yields due to inflation risks, a sharp steeper yield curve, a plunge in the US dollar, and various risk premiums including stock risk premiums, which is likely to directly trigger an economic recession. 2. British media: JPMorgan Chase CEO says the trade war damages the credibility of the United States
The Financial Times recently published an exclusive interview with JPMorgan Chase CEO Jamie Dimon saying that the trade war initiated by US President Trump may damage the international credibility of the United States. Dimon said that the U.S. economic leadership is facing challenges amid Trump’s attempt to reshape the global trade landscape. Current trade uncertainty is shaking the outside world’s trust in the United States. "People will keep paying attention to these issues until the tariffs and trade wars gradually subside.
3. Fitch: Global central banks may step up easing, but the Fed may have to wait until the fourth quarter
Fitch said the unexpected weakening of the dollar has created more room for global central banks to relax policies. Fitch currently expects the European Central Bank and emerging markets to cut interest rates further. As world economic growth slows, falling xmtraders.commodity prices, including oil, will also stimulate countries outside the United States to accelerate monetary easing. This will be in contrast to the Fed, which still expects the Fed to wait until the fourth quarter to cut interest rates. The report said Although the outlook for U.S. economic growth continues to deteriorate, the inflation situation limits the Federal Reserve's ability to relax policies. Fitch expects tariff escalation will push the U.S. inflation rate to 4.3% by the end of the year, xmtraders.compared with the previous forecast of 3.6%.
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