(picture source:搜狗图片)
Hadi, an analyst at Shengbao Bank, said the euro reversed sharply against the dollar yesterday, in part because of a strong rise in U.S. yields and hopes that the U.S. economy would avoid recession. For bulls, the current exchange rate is in a disturbing position. The euro has recently rebounded strongly against the dollar, although there is no threat that a correction will continue to rise. However, if the exchange rate closes below 1.1000, it is beginning to imply the disillusionment of bull market hopes. 1.1000 is not only a key psychological level, but also close to the recent 61.8 percent rebound in Fipolachi.
International trade and the U. S. general election will be the catalyst for the fall of the dollar by 2020. The development of the international trade situation is good news for both the United States and the global economy, and it may also be beneficial to the dollar in the short term. Fritz Louw, a foreign exchange analyst at Mitsubishi Japan, said the resolution of trade tensions could be beneficial to the dollar as a result of a further fall in the euro against the dollar and a rebound in the dollar's index. Of course, even after the Fed's recent relaxation of monetary policy, the dollar's yield gap is still striking. The interest rate environment may prove to be beneficial to the dollar, and the dollar index is easy to break through 98.00. Fritz L Ouw also noted that the "It turns out that the recent data in the United States is not as bad as people worry about. In fact, the last ISM non-manufacturing survey was either around 54-55 or in 2016, when the U.S. economic growth rate was 1.6%. While this growth was still slowing, it was certain that the market's concerns about the recession would be suspended. We still believe that the DPJ's main White House will be an empty message for the dollar. With the market's increasing attention to the U. S. political situation, the Democrats are still at risk."
On November 6 , the dollar index showed a downward trend. However, analysts predict that the weakness of the dollar is unlikely to last long until sometime in 2020, when the global economic recovery and the 2020 presidential election are likely to put pressure on the dollar. Mitsubishi UFJ pointed out that if the Democratic Party enters the White House, the dollar will be hit. As major competitive currencies recovered some of their earlier declines. However, institutions predict that the dollar has limited room for a downward trend and that the weakness is unlikely to last long. Shengbao Bank and Mitsubishi UFJ believe flexible U.S. bond yields will boost the dollar again. However, the Mitsubishi Japanese Federation pointed out In 2005, the international trade situation and the US election will be the catalysts that led to the decline of the dollar in 2020.
The weakness of the dollar is not going to last for a long time, and the yield elasticity of the U.S. debt will limit the decline. The dollar slid down by selling prices, while the euro, the pound and the yen rose by 0.2 per cent as a result of a rise in the purchase price. But some analysts say the elasticity of U.S. bond yields will temporarily limit the downward range of the dollar's index. Hadi, chief foreign exchange strategist at the bank's bank, said the dollar and the u.s. yield rose sharply on November 5. The highest level of complacency in the market is partly due to the hope of easing tensions in international trade. For emerging-market traders, however, it is important to note that the market has already partially digested the international trade Easy to get a good message. Market analyst James Skinner points out that the dollar's decline is largely driven by the euro. Some of the economic data helped to eliminate some of the economic haze that had overshadowed the continent, and the euro was lifted. This week, as markets digest a range of trade-related messages, the United States dollar has been fluctuating, and these developments in the trade situation have an impact on the global economy as a whole. The White House may decide not to impose punitive tariffs on cars imported from Europe, for example, in a few days before the U.S. Department of Commerce, Mr. Roth, said in an interview.
According to the analysis of many market people, there are three main reasons for the recent appreciation of RMB against the US dollar: first, the US dollar index is lower than expected because the US economic data are lower than expected, the eurozone economic performance is higher than expected and the Fed has increased interest rate increases, and the other is the cooling of market risk aversion. Third, China's financial markets persist in opening up to the outside world, attracting foreign investment into the stock market and bond markets, and improving cross-border capital flows. Wen Bin, chief researcher at Minsheng Bank of China, said the Fed had cut interest rates three times in a row, widening the spread on 10-year Treasury yields from 50 basis points at the time of the Fed's first rate cut to 150 at present. The basis point, the spread of interest rates widened so that the RMB exchange rate against the United States dollar stable recovery.
Industry insiders said that two-way fluctuations will be the norm. In recent years, the rise and fall of RMB exchange rate is not uncommon, the characteristics of market-oriented pricing continue to be prominent, the elasticity of exchange rate is gradually enhanced, but the value criterion and price bottom line always exist. This recovery once again shows that the RMB exchange rate can maintain basic stability at a reasonable equilibrium level.
