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The US dollar index hovers around 99, the market is waiting for US data
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Hello everyone, today XM Forex will bring you "[XM Forex Platform]: The US dollar index hovers around 99, and the market is waiting for US data." Hope it will be helpful to you! The original content is as follows:
On the Asian session on Tuesday, the US dollar index hovered around 99.08, and on Monday, the US dollar index fell 0.7% to close at 98.91, the lowest closing price in the past four trading days. The dollar index has fallen 4.89% in April so far, and the dollar will hit its biggest monthly decline since July last year as Trump shakes confidence in the reliability of U.S. assets. Investors are still waiting for the U.S. jobs report to be released on Friday, and jobs are expected to grow, although the growth rate slows sharply from a month ago. This week, the United States will also release first-quarter GDP data and the Fed's favored inflation indicator - core PCE, while Europe will also release GDP and preliminary inflation data. This trading day will be released on the US JOLTs job vacancy data in March, and the United States and Japan will hold a second round of tariff negotiations, and investors need to pay attention.
Analysis of major currencies
Dollar: As of press time, the US dollar index hovered around 99.03. On Monday, the US dollar (USD) weakened slightly, and the market started a busy week, shrouded by suspicion of US (US) trade policy. Although U.S. officials have hinted ongoing negotiations with Asian partners and “day dialogue” with China, Beijing reiterated that it has not participated in the negotiations, emphasizing that there is no winner in the tariff war. Technically, short-term and long-term moving averages reinforce the downward trend. The 10-day index moving average (EMA) sent a sell signal at 99.80 and the 10-day simple moving average (SMA) at 99.43, which is consistent with the 20-day, 100-day and 200-day SMAs at 101.06, 105.70 and 104.51, respectively. Resistance levels are 99.43, 99.53 and 99.80. If DXY falls below its immediate support area 99.08, may quickly retest the 98.00 level below.
1. The United States and Mexico reached two agreements in the agricultural sector
On Monday, the United States and Mexico reached two key agreements in the agricultural sector, quelling conflicts that could intensify tensions between the two neighbors in trade negotiations. Mexico promised to provide water to farmers in Texas after Trump xm-forex.complained that Mexico failed to fulfill a number of The 10-year water deal. The two countries also reached a deal on how to fight the New World Spiral Fly (NWS) pests south of the border, avoiding possible restrictions on U.S. imports from Mexico. This result suggests that despite the more confrontational approach of the Trump administration, Mexico is looking to cooperate with the United States as Mexico seeks Trump to lift tariffs on auto parts, steel and other xm-forex.commodities.
2. UK Food Pass in April Swell reached an 11-month high
UK food inflation hit an 11-month high, with rising retailer costs causing prices for major foods such as bread, meat and fish. According to the British Retailers Association (BRC), food prices rose 2.6% in April, up from 2.4% in March, the biggest increase since May last year. The overall store price index fell 0.1% year-on-year in April, which is the price cessation since the summer of 2024 The smallest drop since. Helen Dickinson, CEO of the British Retailers Association, said the prices of daily necessities, including bread, meat and fish, rose between March and April. During this period, retailers faced "a lot of new employment costs" as both employers' national insurance contributions and minimum wages rose. "As food prices rose to their highest levels in 11 months, non-food prices deflation significantly eased, and store prices did not seem to be too long. "Last month, the Bank of England said that the increase in food inflation at the beginning of this year exceeded expectations. In addition to external shocks, "domestic factors such as labor costs" may also drive inflation.
3. Institutional report lowered UK economic growth expectations in the next two years
On the 28th local time, the British economic forecast agency EYY Statistics Club (EYYClub's) lowered its UK economic growth expectations in 2025 and 2026 in its report released. The agency predicts that the UK's economic growth in 2025 will be 0.8% , lower than the expected 1% three months ago; the economic growth forecast for 2026 is 0.9%, down 0.6 percentage points from previous expectations. British media reported that the decline in expectations is mainly due to the sharp increase in uncertainty caused by the US tariff policy and its blow to the global economy.
4. Trump questioned that the Fed policy is not good for US Treasury bonds
International Bank interest rate strategist said in a report that US President Trump’s recent doubts about the Fed policy have not helped long-term Treasury bonds. Release Federal Reserve Chairman PowellThe post seems to be out of the scope of discussion, but Trump criticized the Fed for slow pace of rate cuts. In addition, strategists say Trump will appoint a new chairman when Powell's term ends in May 2026. U.S. Treasuries went through a very volatile phase in April, although they appear to be stabilizing now. According to Tradeweb, the 10-year U.S. Treasury yield fell 1 basis point to 4.256%. LSEG data shows that money markets show that investors have xm-forex.completely digested the U.S. rate cut in July, and it is also possible to cut interest rates in June.
Institutional View
1. Morgan Stanley: The weak dollar will support US stocks to outperform other global markets
Morgan Stanley analyst Michael Wilson said that the weak dollar will support US xm-forex.companies' profits and help US stocks surpass other parts of the world. Wilson's point is striking as many other Wall Street strategists chant the end of the American era of exceptionalism. He believes that U.S. stocks are a relatively better bet, with less volatility in earnings growth and the higher quality of U.S. xm-forex.companies are the reasons why he holds the above view. Wilson expects the S&P 500 index to remain in the 5,000-5,500 point range. Larger growth will require a significant rebound in earnings expectations and the Fed's easing monetary policy.
2. Barclays still favors long-term U.S. bonds, suggests investors re-establish long positions on five-year U.S. bonds
Barclays strategists said in a report that the bank still recommends investors to buy five-year U.S. Treasury bonds to prepare for the Federal Reserve to lower interest rates. Barclays advised investors to re-establish long positions on five-year U.S. Treasury bonds in mid-April, and after the April 2 tariff announcement was announced, investors have turned neutral given the price repricing and higher uncertainty. "(Turning to) modest tariff rhetoric calmed the market, but the negotiation results remained highly uncertain, which puts pressure on the outlook," Barclays said. Another reason to buy these bonds is that Barclays doubts the U.S. will avoid a recession this year, which increases the reason for the Fed to cut interest rates.
3. Mitsubishi UF: Even if the Bank of Japan is cautious about interest rate hikes, the yen may still strengthen.
Mitsubishi UF's Lee Hardman said in a report that even if the Bank of Japan is cautious about further interest rate hikes at its meeting on Thursday, the yen still has room for appreciation. In view of the U.S. tariffs imposed, the Bank of Japan is expected to lower its economic growth and core inflation expectations this year. However, these forecasts should still show that inflation will still approach target levels in the next fiscal year, heralding further rate hikes. The slowdown in global economic growth will prompt other major central banks, including the Federal Reserve, to further cut interest rates and continue to narrow the yield differences with Japan, so the yen may strengthen further.
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