The recent depreciation of the U.S. dollar index continued as expected, which is a more desirable result since May, with the U.S. index not only achieving depreciation, but more importantly, effectively stopping the magnitude and pace of appreciation. The U.S. index depreciated from 92.3181 points to 91.8177 points, with a range of 0.54%; the highest 92.3654 points and the lowest 91.5227 points, with an amplitude of 0.91%. In fact, from the U.S. economic side, the dollar depreciation does not match the seriousness, but with the dollar currency purpose pointing to a very good match, the dollar old way as well as qualification advantage speaks for itself.
The basic face of the U.S. dollar depreciated mainly by inciting. Throughout the week the U.S. economic data to the good outstanding, regardless of the total economic indicators, that is, the first quarter economic economy economic final value to maintain a solid 6.4%, which shows that the U.S. economy is basically no problem. In addition durable goods orders latest May growth of 2.3%, the April revision is still -0.8% decline, the U.S. economy withstood the pressure of rising commodities, including aircraft and car orders contribute the most, the U.S. economy advanced and quality is the new economic characteristics and focus. In particular, the latest U.S. PCE indicators reached a high of 3.4% in April 1992, the uniqueness of the U.S. economy in line with the basic strategy and policy purposes of the United States, as the fish is the classic U.S. economic distinction, which means that the Federal Reserve rate hike is imminent, the dollar appreciation must be. However, this is not the case, the dollar did not appreciate as expected, but instead showed a relatively large depreciation, the master brilliant means from the technical response to the effect of the main, appreciation to pave the way for devaluation efficient. U.S. public opinion is biased towards bad economic factors is the key, including Treasury Secretary Yellen’s debt on line warning remarks, the long cycle of U.S. infrastructure projects and the pressure of new spending. In particular, the Fed’s main figures will be hawkish for a while and dovish for a while to constantly stimulate sentiment to disperse, the dollar devaluation grip lies in public opinion tactics, the dollar to seek devaluation tactics to renovate the fancy to do their best.
International crude oil prices may be the key grip of the dollar to curb devaluation. A week of international oil prices have risen for the 5th week, the important international reference indicators New York and London levels both climbed to $75, the future oil is expected to rise further still high. At present, the United States itself corresponds to the initiative planning obviously, the oil put to maintain is to stimulate the oil price rise fundamental support, the U.S. oil reserves base Cushing reserves have fallen to historically low levels. Coupled with OPEC oil production cuts are difficult to advance as planned, the double blow of the epidemic or economic pressure, the main oil-producing countries to maintain their livelihood claims or difficult to implement the production cut plan. Coupled with Iran is there sensitive regional political factors more complicated, which makes oil prices and international relations difficult to subside will certainly have a stimulating effect and boost may. At present is the peak of the summer with oil, superimposed on the role of the epidemic vaccine economic recovery, oil demand is increased oil prices are bound to rise reality, more linked to the rising trend of commodity quotes, international oil quotes on the dollar to form a different pattern and shape changes, the dollar homeopathic promotion of the dollar depreciation play focus has been a shift in thinking and approach to the benchmark.
The technical advantages of the dollar still have control and operating space. As a result of the early face of the epidemic, the U.S. super-scale fiscal deficit li show economic entity recovery strength and brightness, corporate earnings and indicators upward is the result of the bailout, but also the U.S. economic cycle quality advantage embodied, manufacturing industry reached more than 60 level, service industry than manufacturing industry benchmarking services more see results, the real economy to show the U.S. deficit cost gains or superior lead. And the U.S. currency put the size of the limit highlights the impact of financial market merit, the dollar liquidity is abundant more conducive to the dollar trend and the efficiency of the technical pendulum. Therefore, the year-end and early fall below 90 points and the subsequent consistent bias depreciation strategy show that the dollar has the ability to harness and advance market conditions, the dollar manipulation can not be avoided. In particular, the Fed put means as well as interest rate oriented with close cooperation, overnight reverse repurchase agreement volume again hit a record first break of $810 billion, edge interest rate guidance and foreshadowing stronger, the dollar trend intention is very significant and fruitful.
It is expected that the dollar will continue to appreciate in the coming week, and the technical fix of unsustainable depreciation will be difficult to avoid, with a solid dollar base and a flexible strategy being the focus. Indicators are expected to point to 93 points, with a meandering 91-92 points being the normative phase.