On Thursday (October 13), Beijing time, the dollar index fell slightly, and it is currently trading around 113.25. The dollar index closed down 0.01% at 113.27 on Wednesday. In the early morning of Thursday, the Federal Reserve released the minutes of the September monetary policy meeting, showing some dovish colors, and the US dollar fluctuated weakly at a high level.
The minutes of the Fed's September meeting said that several participants pointed out that it is important to calibrate the pace of further tightening to mitigate the risks facing the U.S. economy. However, the Fed is still committed to raising interest rates to reduce inflation. "Maybe there is a little hope in the minutes, that is, basically officials are weighing the risk of hikes too strong or too high. This is not the number one concern now. The number one concern is still inflation."
According to CME "Feder Observation": The probability of the Fed hikes 50 basis points in November to the 3.50%-3.75% range is 15.2%, and the probability of raising 75 basis points is 84 .8%, the probability of raising interest rates by 100 basis points is 0%; the probability of 100 basis points by December is 10.1%, the probability of 125 basis points is 61.4%, and the probability of 150 basis points is 28.6%
USD 4 against the Japanese yen once climbed to a 24-year high on Wednesday, maintaining above the level that prompted Japanese officials to intervene last month, and the pound rebounded after a sharp decline in the previous trading day as investors were thinking about the Bank of England's next move.
Data on Wednesday showed that U.S. producer prices increased more than expected in September, further boosting the dollar against the yen. Final Demand Producer Price Index (PPI) rebounded 0.4%, higher than the forecasted rise of 0.2%. In the 12 months to September, the producer price index rose by another 8.5% after rising 8.7% in August.
After the release of PPI data in the United States, the US dollar rose to 146.97 against the yen, the strongest since August 1998, and finally closed up 0.72% to 146.90.
Japanese officials intervened on September 22 to depreciate the yen for the first time since 1998, when the US dollar fell to 145.90 against the yen. "This is just a reaffirm that the Bank of Japan is not defending a certain level, but is solving volatility issues," said Marc Chandler, chief market strategist at Bannockburn GlobalForex, New York. He added that the three-month yen volatility was lower on Wednesday than when Japan intervened last month. The three-month yen implicit volatility was 11.9%, while the high was 13.26% when Japan took action to support the yen on September 22.
officials reiterated that they are ready to take appropriate measures to deal with excessive fluctuations in exchange rate , but it is not clear whether they want to defend a specific level.
Bank of England Governor Bailey reiterated that the Bank of England will end its emergency bond purchase plan on Friday and require pension fund managers to complete the rebalancing of their position by then.
pound pound fell to a two-week low of 1.0951 against the dollar after Bailey's speech. After the British " Financial Times " reported that the Bank of England hinted to private banks that it might extend its bond purchase period, the pound later rebounded to 1.1133 and finally closed up 1.25% to 1.1099.
Among other currencies, the euro remains under pressure, with the euro closing down 0.03% against the dollar on Wednesday at 0.9702.
Gern, an expert from the Kiel World Economics Institute in Germany, said in an interview recently that the Federal Reserve's aggressive interest rate hikes have put pressure on currencies such as the euro, and the economic outlook for the euro zone is even more pessimistic, facing the dilemma of high costs and industrial transfer.
Genn said that the Federal Reserve and the European Central Bank have launched a large-scale interest rate hike to fight inflation, but the inhibitory effect is difficult to show in the short term, and the recession trend of the US and European economies is becoming more and more obvious. He expects that from the fourth quarter of this year to the first quarter of next year, the development momentum of the U.S. consumer and labor market will weaken significantly, and an economic recession will follow. This will have a significant impact on the world economy.
At the same time, Gehn believes that tight energy supply and high prices are the main reasons for the recession of the euro zone. The ECB's interest rate hike and tightening of the financing environment have also cast a shadow on the economic outlook.
On Wednesday, the risk-sensitive Australian dollar fell to a two-and-a-half low of 0.6235, and then rebounded and finally closed up 0.13% to 0.6277.
Australian Finance Minister Chalmos recently denied the possibility of an economic recession, but it still struggles to stop the Australian dollar from falling . National Australia Bank (NAB) business conditions improved to 25 in September from expected 18 and previous 20, but the business confidence index matched the pessimistic market forecast of 5, compared with the previous 10. Earlier in the day, Westpac consumer confidence index fell to -0.9% in October, compared with 3.9% before.
Thursday key data and major events
Big events that need to be paid attention to on Thursday: European Central Bank Vice Governor Kimdos delivered a speech, and Bank of England Monetary Policy Committee Mann delivered a speech.
Summary of institutional views
1. Brown Brothers Harriman Bank : Yellen gives the green light to the strengthening of the US dollar
① Brown Brothers Harriman Bank analyzed that the continued risk aversion impulse and the final repricing of the risks brought by the Federal Reserve's tightening policy may cause the US dollar to continue to rebound after recent adjustments;
② US Treasury Secretary Yellen said that the market determines the value of the US dollar in the interests of the United States, and exchange rate fluctuations are the inevitable result of different policy positions. Yellen's remarks show that she is not worried about the surge in the US dollar at present;
③ However, since the US dollar is a global reserve currency, this strength may have a huge chain reaction around the world. There are pressures in several frontier countries and some weaker emerging market countries, but this is completely beyond the authority of U.S. policymakers. In addition, the market has not reached any form of agreement to curb the rise of the US dollar
2. Westpac: The pound may still fall because the support of the Bank of England is only temporary.
① Given that the Bank of England Governor Bailey had previously stated very clearly that the bond purchase plan is only temporary. The future trend of the pound may remain fragile. The news that the Bank of England may extend the emergency bond purchase plan has slowed down the pound;
② It is expected that the pound will fall back to 1.08 or lower in the next few trading days, and the pound seems to be bearish against the US dollar as the US dollar remains firm. At present, from a global perspective, the US dollar has lost some of its risk aversion demand
3. Morgan Asset Management: The sharp rise of the US dollar may trigger the next crisis
① The outspoken chief investment officer of Morgan Asset Management has a piece of advice: The sharp rise of the US dollar may pave a road to the next market turmoil;
② He said: "I am worried that a much stronger US dollar will bring great pressure, especially to hedge the US dollar asset against back to the local currency... When central bank step on the brakes, someone will rush out of the windshield. Rising financing costs will bring pressure in the system; "
③ The market is likely to have seen some pressure. Investment-grade credit spreads soared by nearly 20 basis points at the end of September. Michele said this coincides with many foreign exchange hedging rollouts at the end of the third quarter, and this may be just the "tip of the iceberg"
4. HSBC : Forecasting the euro to test the 2022 low again
① HSBC is a seller of the euro against the dollar, and the exchange rate is expected to test the 2022 low again, because the recent rebound is considered a position squeeze caused by the premature hope of the Federal Reserve's adjustment of policies, rather than a representative of trend changes;
② HSBC has believed that the euro will fall for more than a year, and does not think it is This trend will reverse; the bank predicts that the euro will fall to 0.9560 against the dollar, which is more than 50 points from its current level, with the lowest price in 2022 at 0.9535
5.RBC : The dollar will rise to 150 versus the yen by the end of the year 5
①RBC Capital Markets Head of Asian Forex Strategy Alvin Tan said: “Given the overwhelmingly strong dollar trend has not retreated, the Bank of Japan may not defend a certain level of yen, but instead attempt to slow the rise of the dollar against the yen by defending at a higher level than before.
②Tan expects the US dollar to rise to 150 by the end of this year, adding: "However, the Bank of Japan has also noticed an increase in volatility at the global macro level, which is now a greater driving force for potential further intervention, which is higher than the fluctuations of any individual currency."
This article is from Huitong.com
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