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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Aihua Foreign Exchange]: China-US trade easing helps the US index rebound, and longs may take profits before heavy data." Hope it will be helpful to you! The original content is as follows:
Asian Market Review
On Monday, the US dollar index once approached 102, and as of now, the US dollar price is 101.52.
The Sino-US and the United States jointly declared the joint statement of economic and trade talks between China and the United States to cancel 91% of the tariffs and suspended the implementation of 24% of the tariffs.
Yuyuan Tantian: China's rare earth export control continues.
Tariffs:
① US Treasury Secretary: Will study how to solve the problem of non-tariff barriers; ② Trump signed an executive order to reduce drug prices and issued a threat to automobile tariffs to countries that do not lower prices; ③ US tariff revenue in April increased by 130% year-on-year to $16 billion.
Federal Governor Coogler supports keeping interest rates unchanged at current levels and still believes that tariffs will have a significant impact.
Trump's "Great Tax Cut Act" is announced: a 10-year tax cut of 4 trillion yuan, a debt ceiling of 4 trillion yuan is raised, and a millionaire tax proposal is not mentioned. Trump: Sanctions on Syria may be relaxed, or even lifted sanctions on Syria altogether.
Iranian government spokesperson: Russian President Putin will visit Iran.
India says India-Pakistan military operationsThe avaforexcn.commander-in-chief agreed to demote the situation.
Summary of institutional views
Danske Bank: Looking forward to the key US economic data this week, overall CPI and core CPI...
The US April CPI data will be released on Tuesday. We predict that the overall CPI monthly rate will be 0.31% (-0.1% in March), and the core CPI is expected to grow by 0.33% month-on-month (the previous value is 0.1%). Thursday's PPI report is expected to show that the overall indicator has risen by 0.3% month-on-month (-0.4% in March).
It is worth noting that the retail sales data for April released on Thursday also attracted attention, with economists expecting growth to slow to 0.6% from 1.5% in March, and industrial output is expected to rise slightly by 0.1% month-on-month (-0.3% in March).
Rabobank: The US dollar will be supported by short cover, but the upward space of the yen will be limited
The US dollar is the worst performing currency among the G10 currencies since the beginning of the year. Since Trump announced the tariff policy on April 2, the US dollar has shown characteristics of risky assets. Driven by optimism in the trade deal, the dollar rebound today confirmed this theme. But we believe the weakness of the dollar this year is related to long positions accumulated by investors chasing “American exceptionalism” trading in the past few years. The market is worried that Trump's tariff policy may trigger a recession in the United States, leading to "exceptionalist" trading quickly closed positions, and the dollar is under pressure.
Last week, Britain became the first country to reach a limited trade agreement with the United States. A month ago, the market speculated that Japan might win this honor. As we have emphasized many times, Japan has a relative advantage in the US-Japan trade negotiations - it is the largest source of foreign direct investment in the United States, and has close ties with the US in the field of defense, and regards itself as a scientific and technological collaborator. But the time of Japan's July Senate election increased the avaforexcn.complexity of negotiations, especially considering the sluggish support rate of Prime Minister Shigeru Ishiba.
The tightening of monetary conditions implicitly appreciated by the Japanese yen during the year has reduced the need for the Bank of Japan to accelerate interest rate hikes. However, if the yen quickly gives up the gains, it may rekindle expectations of interest rate hikes, so we expect yen buying will limit the recent upside potential of the U.S. and Japan. We believe that the dollar short cover demand in this quarter will support the exchange rate, but if the United States and Japan reach a avaforexcn.compromise on trade issues, the United States and Japan may restart the downward trend in the second half of the year and maintain the 12-month target of 140.00.
Deutsche Bank: The impact of U.S. trade progress on the dollar is unclear
Deutsche Bank analyst George Salaveros said in a report that the impact of recent progress in easing global trade war on the dollar is unclear. He said more positive news about U.S. trade in recent weeks has benefited more to the rest of the world in terms of economic growth than to the United States. This is not good for the US dollar, especially currencies that are sensitive to economic growth. However, for external financing in the United States, a less hostile U.S. government is obviously more favorable to the dollar because it does not hinder the inflow of funds too much.
Analyst Christopher Lewis: Europe and the United States may fall to..., the United States and Japan have formed a bottoming mode
Europe and the United States: Before finding real support, it may fall to 1.0950 level, but we can only wait and see. I don't like to buy at the bottom at the moment.
US and Japan: There is a rebound at the moment, but it encounters obstacles at the 148 mark. Now that the U.S. and Japan have formed a bottoming pattern around 140, some trade tensions seem to be disappearing, the currency pair is avaforexcn.completely reasonable. At least from the stock market, the pair does tend to rebound with risk appetite and risk appetite, and the stock market has already broken through the ceiling during trading hours. So I expect to try to get back to the 200-day moving average before everything is over, and the occasional pullback will provide a buying opportunity.
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