Reporter Zhu Baochen Intern Reporter Han Yu
Date 1 During the European trading session, the US dollar index quickly fell below the 105 mark, with a drop of more than 1% at one point, and the intraday low reached 104.5607, a new low since the end of June this year. Wind data shows that from November 1 to December 1, the US dollar index has fallen by about 6.17%. As of December 2, the US dollar index was 104.8071, still below 105, down about 8.4% from the highest point of the year set on September 27 at 114.4777.
Source: wind
Dean of China Foreign Exchange Investment Research Institute Tan Yaling analyzed in an interview with a reporter from Securities Daily that since November, the market has been focusing on the discussion that the inflation of the Federal Reserve has peaked. Therefore, the expectation that the Federal Reserve will slow down the pace of interest rate hikes has also become an important factor in promoting the depreciation of the foreign exchange market US dollar. At the end of the month, Federal Reserve Chairman Powell increased his striking argument to "rate up" and the US dollar also ended with depreciation throughout November. In addition, the rebound of European currencies exceeded expectations and maintained the continuity of the US dollar index pullback to 105. Among them, the euro exchange rate against the US dollar returned to above parity, and appreciated rapidly at the end of the month; the pound against the US dollar exchange rate rose to 1.22 pound against the US dollar level.
Industry insiders believe that in addition to Fed Chairman Powell's "dove" voice, PCE, the inflation indicator that the Fed values most, shows signs of decline, which also prompts the market to further digest the expectation that the Fed will slow down interest rates in December, and the US dollar index has also lost the momentum to continue to rise.
Many data released on December 1 point to the further slowdown in the growth rate of US inflation. At the same time, the effect of continued sharp interest rate hikes on economic activities has gradually emerged.
From the perspective of inflation, the US core PCE price index recorded 0.2% month-on-month in October, lower than the previous value of 0.5% and the market expected 0.3% level, setting the smallest increase since July this year. recorded 5% year-on-year , with the previous value of 5.1%, slowing down for the fourth consecutive month.
From the perspective of manufacturing prosperity, the US ISM and Markit manufacturing PMI entered a contraction range in November, hitting a new low since May 2020. Among them, the ISM manufacturing PMI was 49, and the Markit manufacturing PMI final value was 47.7, both lower than the " boom and bust line " of 50. ISM manufacturing PMI also fell from the boom and bust line for the first time since June 2020, with the new order index recording 47.2. In the past six months, five contractions have also pointed to a decline in manufacturing prosperity that has led to weak demand.
From the perspective of the employment market, the hot job market in the United States has shown signs of cooling down. Among them, the number of people applying for unemployment benefits in the United States for the week ending November 26 was 225,000, slightly lower than the market expectations of 235,000, but the number of people applying for unemployment benefits in the week ending November 19 was 1.608 million, higher than the expected 1.573 million, setting a new high in two months. At the same time, the number of layoffs of challenger companies in the United States increased by 416.5% year-on-year in November, far higher than the previous value of 48.3%. The number of layoffs was 77,000, more than five times the same period last year, mainly layoffs by technology companies.
In the view of , CITIC Securities' chief economist Mingming, the driving force driving the upward trend of the US dollar index mainly comes from the Federal Reserve's austerity policy, and , the U.S. economy is stronger than other non-U.S. , and the factors driving the downward trend of the U.S. index are mainly the relatively strong performance of non-U.S. economies, especially in Europe. From the current point of view, the temporary highs of the US dollar index may have passed.
Tan Yaling believes that for the rest of this year, the fluctuation of the US dollar index is expected to continue. The US dollar index may fall back to around 100 points at the end of the year, and the end of the year may still maintain a slight appreciation trend.
However, there are also studies that remind that although the US dollar index may have passed the temporary high point, the unilateral decline of has not yet been confirmed, and we still need to pay attention to subsequent US economic data. As a research report by Pacific Securities said, from the historical trend, the US dollar index often fluctuates and consolidates for nearly a year and a half after it quickly rises to the top area. The logic behind this is that the US economy has begun to decline, and the market has begun to expect the Fed rate hike to slow down and the US dollar index to decline, but as the interest rate hike slows down and moves toward the ground, if the US economy stabilizes again, it will support the US dollar to strengthen again.
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production | Liu Ruizhi
review | Hou Jining
edit | Bai Baoyu
final review | Peng Chunlai
