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The US dollar has risen for the first week since mid-March! Trade conflicts continue to signal
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Hello everyone, today XM Foreign Exchange will bring you "[XM Group]: The US dollar is rising for the first week since mid-March! There are constant signals of trade contradictions." Hope it will be helpful to you! The original content is as follows:
The US dollar climbed 0.31% on Friday, closing above 99.60, ushering in its first weekly rise since mid-March, and the market showed optimistic expectations for trade tensions. This week, there were conflicting signs of whether tariffs tend to ease, causing the US dollar to fluctuate.
On Tuesday, President Trump hinted that tariffs would be eased, saying that direct negotiations had begun, but the remarks had not received an optimistic response from Asian powers. Fiona Cincotta, market strategist at CityIndex, said: "I don't think the situation must be clearer now, but it seems there is no sign of further escalation. It feels like things are moving in another direction. If there is any difference, it seems that it is more inclined to ease rather than escalation." Cincotta said we have seen the dollar step out of the oversold zone. But it is definitely too early to open champagne for the dollar's recovery, and we are not yet at that point.
A new survey released by the Federal Reserve on Friday shows that rising global trade risks, overall policy uncertainty and the sustainability of U.S. debt rank high among potential risks in the U.S. financial system.
This is the first Fed's semi-annual financial risk survey since President Trump took office, and the impact of his radical policy agenda is obvious, especially the impact of tariff measures. 73% of respondents believe that global trade risks are the primary concern, accounting for more than twice that in November. Half of the respondents believed that overall policy uncertainty was the primary concern and the proportion also increased xm-forex.compared with the fall.
The report said, “Worries about changes in trade policy are the most mentioned risks in this cycle. Although many interviewedThose who believe that tariffs are the main risk, but some respondents pointed out that the domestic economy can withstand the increase in tariffs on imported goods and will only be slightly disturbed. The respondents believe that the possibility of an escalation of the trade war may have more serious consequences. ”
The respondents pointed out that “changes in government spending focus and changes in the degree to which the United States participates in international affairs” have led to uncertainty. The latest survey also found that respondents were more concerned about the issues related to recent market turmoil, with 27% of respondents worried about the operation of the U.S. Treasury market, higher than 17% in the fall. Respondents’ concerns about foreign investors’ withdrawal of U.S. assets and the dollar exchange rate have also increased.
On Monday, the dollar fell to a new low since April 8, 2022 to around 97.92, but with Trump’s repeated changes in his speech, the dollar returned to above 99, but at the 100 mark, The pressure is high, and it has not been able to break through the 100 mark this week, although the Fed warned that asset valuations remain relatively high even after the sell-off in April and residential real estate prices are at high levels.
The Fed warned that hedge funds’ leverage ratios (especially those of large institutions) have reached or approached historical highs, but the Fed believes that leverage ratios have dropped in early April as funds close positions.
But the Fed said that xm-forex.commercial real estate prices, a long-standing concern after the COVID-19 pandemic, have shown signs of stabilization. Although the stock market and U.S. bond markets are under pressure in early April, the Fed said that both markets remain in order.
The U.S. banking system remains solid and resilient, with the capital adequacy ratios of institutions remaining strong. But the Fed found that banks' credit xm-forex.commitments to less regulated non-bank institutions continue to increase.
The Fed also warned that hedge funds' leverage ratios (especially those of large institutions) have reached or approached historical highs, but the Fed believes that as funds close positions, the leverage ratios have dropped in early April.
The U.S. dollar rose 0.67% against the yen on Friday to 143.555 yen and rose 0.09% against the Swiss franc to 0.827 CHF.
Japanese Treasury Secretary Katsunobu Kato said after meeting with U.S. Treasury Secretary Becent Becent, that the two sides did not discuss setting exchange rate items. Trump has previously accused Japan of weakening the yen to give its exporters an advantage.
Japan's chief trade negotiator, Economy Regeneration Minister Ryosa Akazawa, will hold a second round of bilateral trade negotiations with Becent next week.
Bank of Japan Governor Kazuo Ueda said on Thursday that the central bank would continue to raise interest rates if the underlying inflation rate moves closer to the 2% target as expected, but he reiterated that policymakers need to carefully study the impact of U.S. tariffs. It is widely expected that the Bank of Japan will keep interest rates unchanged at a two-day meeting ending on May 1.
Despite unexpectedly strong retail sales data in the UK, the pound fell 0.1% against the dollar to $1.3325. Data showsRetail sales rose 0.4% in March, better than the 0.4% decline expected by economists in a Reuters survey. Overall retail sales rose 1.6% in the first quarter, the strongest in four years.
KitJuckes, chief foreign exchange strategist at Societe Generale, said the pound had a little xm-forex.comfort from it. I don't want to overstate it, but the pound once had a good performance and was in danger of a fallback, and now at least get a little help from the data for the time being. "
Bank of England Governor Bailey said on Thursday that he was concerned about the possible impact of U.S. President Trump's import tariffs and retaliation measures taken by other countries on economic growth, but he believes the UK economy is not close to recession.
Bank of England's Monetary Policy xm-forex.committee (MPC) xm-forex.committee member Green said tariffs would put downward pressure on UK inflation. These remarks support bets on the Bank of England's rate cuts. The market is currently expecting the Bank of England to cut interest rates twice in the next three meetings and at least another by the end of the year
The euro fell 0.11% against the dollar to $1.1377. The survey shows that if the euro/dollar continues to rise to 1.20 in May, then dovish will demand that the ECB cut interest rates by half a basis point in June.
The euro/dollar may rise further next month after rising to 1.1572 this month, hitting a 41-month high, which could weigh on euro zone inflation and provide opportunities for the ECB to cut interest rates significantly on June 5.
The ECB Management xm-forex.committee OlliRehn said on Thursday that the possibility of a 50 basis point cut will depend on the medium-term inflation outlook and whether the economic growth outlook improves or worsens.
Also on Thursday, ECB Executive xm-forex.committee member Lian En said, "There is no reason to always take the preset rate cut of 25 basis points." The ECB has cut interest rates by 25 basis points seven times in the past year.
Forex market, in addition to the 100th rally next week, the Bank of Japan will issue interest rate resolutions on Thursday and the ECB Friday In addition to the release of the Economic Bulletin, Canada will hold federal elections next Monday.
Canadian Prime Minister Mark Carney said he believes that U.S. President Trump should wait until the results of the Canadian election are released before discussing the issue of resolving the trade conflict with the country's leaders.
Carney said in a campaign in Newfoundland and Labrador that his interpretation was that Trump was waiting to see "who can get the extensive authorization of Canadians, is it someone in line with him, or is someone who will stand up for Canadians? I will stand up for Canadians. I hope Canadians support me. ”
The Canadian people will vote on April 28. Given Trump’s aggressive trade policy, Carney is trying to position himself as the best guardian in this time of high economic uncertainty. He is trying to portray his main rival, Pierre Poliev, as too similar to Trump, Carney said he “can be spoken with Trump at any time”, “but we will be in the form of a sovereign state.”, negotiate on our terms. According to a government official, Canada had contacted the White House last week, hoping to arrange Carney and Trump in Mandarin, but received no response.
Carney said he would not meet with Trump to discuss trade relations until Trump stops thinking of Canada as the 51st state in the United States and publicly acknowledges Canada's sovereignty.
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