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The US dollar index fluctuates below the 100 mark, and the market is waiting for the initial data of the United States
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange]: The US dollar index fluctuates below the 100 mark, and the market is waiting for the US initial request data." Hope it will be helpful to you! The original content is as follows:
The dollar index fluctuated narrowly on Thursday, with hopes of easing trade tensions and the threat of President Trump to abandon the firing of the Fed chairman, which xmtraders.comforted investors. The dollar rebounded against major currencies on Wednesday, with the U.S. dollar index rising 0.94% on Wednesday, with the daily line recording two consecutive positives, reaching a high of 99.94, a new high in the past week, closing at 99.90. This trading day will be released on the initial monthly rate of durable goods orders in the United States in March and the number of initial unemployment claims in the United States for the week ending April 19. Investors need to pay attention to it. In addition, we need to continue to pay attention to the relevant news about the international trade situation and geopolitical situation.
Analysis of major currencies
U.S. USD: As of press time, the USD index hovered around 99.72. The USD index once approached the 100.00 mark during the session on Wednesday, but then fell rapidly, and the North American period remained around 99.20. Market volatility stems from remarks by U.S. President Trump, who said he would not fire Fed Chairman Powell (although he expressed dissatisfaction with high interest rate policies). Trump's remarks have caused the market to have certain doubts about US policies, which in turn affects the trend of the US dollar. On the daily chart, the trend of the US dollar index shows a certain weakness. The price has not broken through the 101.00 level above recently and continues to fluctuate in a lower range. From a technical perspective, the resistance of 100.20 is still obvious, and there is a certain support when the price approaches the 97.92 area, but if the price falls below this level, it may return to the 97.00 support range, forming a new price low. The negative value of the MACD indicator and the low RSI level show that market sentiment is relatively short, and there is a risk of further downward trend in the short term.
1. Senior European Central Bank official: US dollar asset allocation shifts from over-allocation to a more natural allocation ratio
European Central Bank chief economist Lian En said on Wednesday that the recent asset allocation in asset portfolio allocation may be reduced.It means moving from "over-allocated US dollar assets" to a more natural allocation ratio, that is, achieving a more balanced state between US dollar assets and other currencies (including euros). In a panel discussion at the International Finance Association (IIF) meeting, Lian En said that since President Trump was elected last year, the "pricing of U.S. assets has reflected perfect expectations." He added that the recent outflow of US Treasury bonds may be seen as a reconfiguration, "either it will stabilize or trigger deeper reflection." He said that in most portfolios, the weight of dollar assets will still be much greater than that of euro assets.
2. The U.S. Treasury Department released data on investment funds and foreign investors purchasing U.S. bonds in the past two weeks.
The U.S. Treasury Department data showed that in the past two weeks, investment funds bought $26.249 billion in 10-year Treasury bonds that expired on February 15, 2035, xmtraders.compared with $26.954 billion last month; foreign investors purchased $7.168 billion in 10-year Treasury bonds that expired on February 15, 2035, xmtraders.compared with $4.636 billion last month. The investment fund purchased $39.725 billion of three-year Treasury bonds due on April 15, 2028, which was $44.782 billion last month; foreign investors purchased $4.74 billion of three-year Treasury bonds due on April 15, 2028, which was $4.912 billion last month. The investment fund purchased $16.2 billion of 30-year Treasury bonds due on February 15, 2055, which was $15.436 billion last month, while foreign investors purchased $2.33 billion of 30-year Treasury bonds due on February 15, 2055, which was $2.14 billion last month.
3. Goldman Sachs lowered its forecast for the first quarter of the U.S. GDP growth rate to 0.1%
Goldman Sachs economists now expect the annualized growth rate of the U.S. economy in the first quarter to be 0.1%, lower than the previous forecast of 0.4%. U.S. new home sales grew more than expected last month, but the construction deflator declined less than Goldman Sachs expected, weakening interpretations of inflation-adjusted growth. The United States will announce its first-quarter GDP initial value on April 30.
4. "Don't go against the Trump administration" is the new "Don't go against the Federal Reserve"
Less than 100 days after Trump's second administration came to power, traders have realized the reality that Trump may be more willing to subvert global trade than expected to increase domestic manufacturing and reduce trade deficits with other countries, especially after the "Liberation Day" tariff announcement on April 2. This new reality has disrupted the U.S. stock market. Mike Reynolds, vice president of investment strategy at wealth management xmtraders.company Glenmede, said, "The result is equivalent to an external shock, such as the COVID-19 pandemic. People often say, 'Don't go against the Fed', 'Don't go against the president' is the new 'Don't go against the Fed'."
5. Policy changes affect obvious impacts on U.S. business activities decline and market confidence is damaged
S&P Global MarketChris Williamson, chief business economist at the Farm Intelligence xmtraders.company: US PMI data in April showed that growth in business activity slowed significantly in the early second quarter, while optimism about the outlook dropped sharply. At the same time, the intensified price pressure has caused a headache for the Federal Reserve. Inflation is about to rise, and the Fed is facing increasing pressure to boost a weak economy. Output growth in April was the slowest since December 2023, indicating that the U.S. economy has grown at only 1.0%. Manufacturing is generally stagnant as any favorable impact of tariffs is offset by increased economic uncertainty, supply chain concerns and a decline in exports, and the service economy is slowing amid slowing demand growth, especially in exports such as tourism and tourism. Meanwhile, confidence in business conditions in the xmtraders.coming year has deteriorated dramatically, largely due to growing concerns about the impact of policies.
Institutional View
1. JPMorgan Chase: If U.S. tariffs damage the global economy, the pound will weaken
Analysts of JPMorgan Chase said in a report that if U.S. tariffs damage the global economy, the pound may weaken. They say a xmtraders.common view from investors is that in a tariff-focused market, the UK economy relies more on the service sector and exports less to the U.S. goods, and the pound should benefit from it. Plus, the 10% tariff imposed by the United States on the UK is much lower than the one imposed on other economies. However, the spillover effect of global tariff policies on the UK economy and the lack of fiscal wiggle room in the UK means that the pound will suffer instead. Analysts expect the pound to strengthen due to a potential UK-US trade deal that could be short-lived, as this appears to be reflected in the price.
2. Institutions: The dovish transformation of the ECB in April opened the door to further rate cuts
The ECB pointed out at its April meeting that U.S. tariffs were a "negative shock" that increased the region's "downside risks to economic growth." In addition, xmtraders.compared with the time when it was considering a pause in interest rate cuts in March, the ECB's tone at its seventh rate cut was significantly more dovish. As the ECB did not signal that it was about to change the pace of rate cuts, some analysts said they no longer expected the ECB to suspend rate cuts as they did in March, as it was unanimously passed a 25 basis point cut at its April meeting and promised to remain "flexible and focused" on the new shock, which increased the possibility of another turn to easing. They now expect the ECB to cut interest rates by another 25 basis points in June and may cut interest rates again in July. They believe the ECB will cut interest rates in total five times in 2025.
3. JPMorgan Chase: If US tariffs damage the global economy, the pound will weaken.
Analysts of JPMorgan Chase said in a report that if US tariffs damage the global economy, the pound may weaken. They say a xmtraders.common view from investors is that in a tariff-focused market, the UK economy relies more on the service industry and exports less to the U.S. goods.Pound should benefit from it. Plus, the 10% tariff imposed by the United States on the UK is much lower than the one imposed on other economies. However, the spillover effect of global tariff policies on the UK economy and the lack of fiscal wiggle room in the UK means that the pound will suffer instead. Analysts expect the pound to strengthen due to a potential UK-US trade deal that could be short-lived, as this appears to be reflected in the price.
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