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Hello everyone, today XM Forex will bring you "[XM Foreign Exchange Market www.xmxmxm.cnmentary]: A collection of good and bad news affecting the foreign exchange market." Hope this helps you! The original content is as follows:
The foreign exchange market is currently in a critical period where intensive data release and policy expectations are intertwined. The dollar index is under pressure and is in sharp contrast with the differentiation of non-US currencies. The following www.xmxmxm.cnbines the latest economic data, geopolitical dynamics and policy signals to sort out the core influencing factors of each major currency to provide reference for today's trading.
Negative factors have been concentrated: U.S. economic data has recently shown weakness, becoming the core force suppressing the dollar. ADP employment data showed that private www.xmxmxm.cnpanies laid off 13,500 people per week in the past month, a sharp increase from the previous 2,500 jobs, reflecting signs of cooling in the job market. The consumer confidence index fell to 88.7 in November, the lowest level since April and significantly lower than the market expectation of 93.2, highlighting the decline in residents' willingness to consume. Affected by this, the U.S. dollar index has broken through the key 200-day moving average of 99.816, and sellers have taken control of the market. At the same time, market expectations for the Federal Reserve to cut interest rates in December have increased to 81%, and expectations of policy easing have further weakened the appeal of the US dollar.
Potential support cannot be ignored: The resilience of the U.S. dollar stems from the relative advantages of the U.S. economic fundamentals. The Atlanta Fed predicts that GDP growth will accelerate from 3.8% to 4.2% in the third quarter, and the economic growth rate will still be ahead of major developed economies. This contradictory pattern of "weak data but stable growth" prevents the US dollar from experiencing a unilateral plunge yet, and may fluctuate in the 99-100 range in the short term.
Japanese yen: Expectations of intervention provide support: The yen has recently been boosted by concerns about the Japanese government’s foreign exchange intervention, and the U.S. dollar/yen has fallen back from highs and adjusted. If bears continue to dominate, the exchange rate may advance.One step closer to 156.20. However, the tone of the Bank of Japan's easing policy has not changed. The 10-year government bond yield is only 1.73%, which is significantly different from the U.S. bond interest rate, limiting the room for the yen to rebound. The 157.00 mark above poses strong resistance.
Euro and Pound: Lack of clear direction: The Eurozone economic growth is expected to be only 1.5%, and energy price fluctuations and trade barriers continue to put pressure. Although the weakening of the US dollar provides a breathing space for the Euro, the policy support after the European Central Bank's consecutive interest rate cuts is insufficient. EUR/USD may test the 1.15 support level in the short term. The pound was affected by policy differences and fiscal tightening from the Bank of England, and fluctuated in the range of 1.30-1.32. It is necessary to pay attention to the guidance of subsequent employment data.
New Zealand dollar: Interest rate cut expectations suppress the trend: The market generally expects the New Zealand Federal Reserve to cut interest rates by 25 basis points to 2.25% this week. This expectation has been reflected in the exchange rate in advance. The New Zealand dollar has a strong short-term sentiment, and it is difficult to have a trend rebound opportunity in the short term.
Australian dollar and Canadian dollar: The game of oil price drag and copper price boost: International oil prices continue to be depressed, WTI crude oil is approaching a multi-year low of US$57, breakthroughs in the Russia-Ukraine peace agreement negotiations have reduced geo-premiums, and concerns about oversupply have significantly suppressed energy currencies such as the Canadian dollar. However, London copper and Shanghai copper rose for two consecutive days, and LME copper prices rose to a nearly two-week high, supporting the resource export-oriented Australian dollar and partially offsetting the negative impact of falling oil prices.
Emerging currencies: Structural opportunities emerge: The Baltic Dry Index has risen for the ninth consecutive year, reaching a new high of 2,309 points in the past two years, reflecting the recovery of global shipping demand, which is good for emerging market currencies that rely on www.xmxmxm.cnmodity exports, and short-term depreciation pressures such as the RMB and the South African Rand have eased.
At the geopolitical level, we need to track the progress of the Russia-Ukraine peace negotiations. If an agreement is reached, it will further lower oil prices and be negative for energy currencies; in terms of data, the United States will release durable goods order data. If the weak trend continues, it may intensify the decline of the US dollar. In terms of operation, it is recommended to avoid unilateral bets and take advantage of the weakness of the US dollar to place short-term long orders in the Euro and Australian dollars. At the same time, set strict stop losses to prevent the risk of policy expected reversal.
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