Currently a variety of factors intertwined complex, the direction of the exchange rate is stuck leading to technical meandering characteristics are obvious, the dollar restraint appreciation remains the main, last week the U.S. index rose from 92.1292 points to 92.7084 points, only a slight appreciation of 0.62%; range is located at 92.0805-92.8309 points, the amplitude of 0.81%. But the main basket of currencies moved more divergently and with greater complexity. Among them, the Canadian dollar depreciated due to the fall in oil prices, with the exchange rate level going down from C$1.24 to C$1.26. The British pound and the euro trended on the downside, with the pound reaching a low of $1.37 and the euro a low of $1.17. The Swiss franc and the Australian dollar remained largely stable, with exchange rate levels of CHF 0.91 and USD 0.74, respectively. The Japanese yen and New Zealand dollar, on the other hand, fluctuated slightly, with both meandering between 110-109 yen and $0.69-0.70. The pace of adjustment of China’s yuan was more disturbed by the dollar and offshore, with the onshore yuan depreciating slightly and the exchange rate level only going down from 6.4760 yuan to 6.4792 yuan. Conversely, the offshore RMB showed a slight appreciation, with the exchange rate level going up from 6.4789 yuan to 6.4723 yuan, with a range spanning between 6.44-6.48 yuan.
Throughout the current market, the exchange rate factors are subject to public opinion guidance or argument-based, coupled with data dislocation comparison makes the direction difficult to determine, especially the U.S. factors contradictory personalities in particular, the U.S. dollar uncertainty dispersion regulation personality highlights.
One is to the Federal Reserve as the focus of the dominant mood. The current Fed policy guidance is the main influence, this week focus on the Fed Chairman Powell Congress to listen to the testimony of attention. Especially in the face of the release of the latest U.S. inflation data, about the Fed’s definition of inflation and policy correspondence is hot. However, the Fed chairman’s testimony will only temporarily become a temporary transition to observe the wording, and thus the dollar bias upward is more prominent, or mainly focused on inflation after the rate hike response speculation and expectations. At present, see, along with the twists and turns of the U.S. economic cycle, some economic data on the regulation does not represent economic malpractice, but for the Federal Reserve monetary policy test is larger, the policy choice of distress increased, the overall price trend adjustment is more obvious. The current U.S. fundamentals are more tangled, on the one hand, the fiscal deficit pressure continues to amplify, the fiscal year so far nine months of data bit 2.4 trillion U.S. dollars, although this is slightly lower than last year’s level of more than 3 trillion, but for the economic recovery or monetary policy to increase the difficulty, so the Fed wavers between hawkish and dovish, market speculation is also difficult to find the direction or trend-oriented. It is expected that this week the dollar is more likely to rise, but the restraint will still restrain the rate of increase and progress. Market sentiment and scale trading in the off-season, exchange rate fluctuations narrow overlay direction uncertainty, uncertainty is the focus.
The second is the U.S. economic data is showing a clever match. Among them is the June retail data bit up 0.6% with July consumer confidence for the decline to 85 discordant prominent, but the concept of time is different is the focus. But this is the important reason that led to the plunge of U.S. stocks over the weekend. The psychological reflection of excessive is a must for the stock index regulation, but also to comply with the skills done. Especially the U.S. inflation data caused by the concern and expectations to strengthen the rise is obvious, after all, the inflation rate rose to 5.4% is difficult to say temporarily, so far for three consecutive months exceeded the standard 3% or more and show accelerated and high situation, which is a great challenge to the Federal Reserve monetary policy. However, the Fed faced with the helplessness of supporting fiscal policy, contraction of currency or debt reduction plan can not be advanced, otherwise the future causes the economy out of control will inevitably lead to a full dislocation of the dollar, the key to the Fed’s prudence lies in the difficulty and uncertainty of the future assessment.
The main background and reasons for the above situation cannot be separated from the international oil trend strategy. Last week, international oil prices fell significantly, but maintain more than $ 70 is also a strategic guidance or planning. After all, the original resource and commodity characteristics of oil has been imposed on the financial attributes, so there is a cycle of volatility with personalized features significantly. Coupled with the current OPEC oil-producing countries split situation is obvious, the base level of oil prices has been the fatal weakness of oil-producing countries, and thus the oil high does not make money and oil downturn is difficult to promote the dilemma is serious. In contrast, the U.S. policy design as well as environmental needs happen to seize the oil regulation is evident. At present, the dollar constantly ramming self-existence, but their own deficiencies or problems are also very serious, with the help of external regulation of oil and before gold are associated with the overall policy framework or application of the dollar, the market is worth considering the role of the elements environment on the dollar and the U.S. economy and policy. So oil should have been an OPEC producer thing, but now the U.S. factor has been the top priority, which is also the means and the way the dollar is configured, combined and applied. It is expected that the rise in oil prices will continue this week, the summer demand for oil and geopolitical relations are not conducive to oil consensus response, international oil prices subject to the dollar strategy will be the inevitability or naturalness of the rise to advance.