Analysis Of Foreign Exchange Trend: Exchange Market Performance Is Not Bad.

Tuesday (May 27th) New York time. dollar The index dropped slightly after the initial hit of 80.56 point highs, while the euro dollar exchange rate recorded a rebound again after hitting the support interval of 1.3610-15, indicating that the overall trend is still tenacious, and there is a strong need for further news to promote a significant breakthrough in the foreign exchange market trend.

On the same day, spot gold prices fell nearly 2%, and European and American stock markets also continued to rise. Compared with the recent situation, the market continued to be unpopular, which was rather boring. The reason for this is that market investors still hold cautious anticipation before the crucial meeting of the European Central Bank next week.

Although the ECB officials have recently intensified their anticipation of further easing policy measures at next month's meeting, investors are still worried that the final easing of the "New Deal" will be thunderstorms, heavy rain or even thunderstorms, based on the customary conservative stance of the European Central Bank. So before the European Central Bank's prospects for the new deal were settled, investors would not have much desire to make a stronger short selling of the euro exchange rate, which also led to the failure of the ECB officials to use verbal rhetoric to suppress the euro exchange rate.

Delaki, President of the European Central Bank (ECB), said on her participation in the ECB Forum on Tuesday that the central bank has realized the risk of over a long period of low inflation and that the European Central Bank has tools to bring inflation back to its target level again. (Mario Draghi)

Delaki said that the tools needed by the European central bank can be ordered. Euro Regional inflation is back below the central bank's target of close to 2%. Euro zone inflation was 0.7% in April. He pointed out that the price adjustment in some euro area countries has slowed down and kept inflation at a low risk. But he also said that there was no risk of deflation. Delaki also said that some countries in the European Union have made great progress, but some other countries are still lagging behind. He thinks that Europe needs to consider what path it will take to be perfect.

Prior to this, Delaki said in his speech on Monday (May 26th) that he would not ignore the euro zone inflation rate and had never acted on it. He added that if the foreign exchange market or the money market situation further caused a tight supply of liquidity, then the wording of the European Central Bank's routine policy should also be adjusted.

Delaki also revealed that if the inflation rate is expected to further lower in the future, the ECB will have a good reason for carrying out a full range of asset acquisition actions. He also stressed that the European central bank must take measures to ease the tight supply of market credit. If inflation expectations are delayed by less than 2%, the ECB will be particularly vigilant and pay attention to it and will prepare for it when more crisis situations emerge. At the same time, the ECB must pay special attention to the vicious circle of low inflation and low inflation expectations.

Delaki's remarks further highlighted Europe. Central Bank In the face of concerns that inflation continued to linger at low levels, it was also endorsed by Ewald Nowotny, the European central bank executive, on Tuesday. In the next two years, the euro area inflation rate may be "significantly" lower than the European Central Bank's target of slightly below 2%, and the ECB is also concerned about deflation or stagflation caused by the low inflation in the euro area. He stressed that the ECB will discuss next week's actions to prevent the euro zone's economic recovery from flameout, including interest rate cuts.

Considering that the action of the European Central Bank at next week's meeting is already a consensus among the market, the measures to suppress the euro have been very limited. After a strong support from the euro and the US dollar in the 1.3615 tier, its short-term actions may be exhausted, and further breakthroughs in the market require strong external information. In the second half of this week, when economic news remains scarce, investors may advance more stakes to the ECB conference next week.

The dollar index fell slightly after hitting 80.56 of its nearly eight week high on Tuesday. The day's economic data show that in March, the S&P/CS20 index of big cities in the United States increased by 12.4% annually, better than the expected increase of 11.8%, which marks the warming of the housing market and the overall economy in the United States. Meanwhile, the initial value of PMI in Markit service industry rose to 58.4 in May, the highest since March 2012, and the initial value of composite PMI has risen to 58.6 since April 2010. In May, the chamber of commerce consumer confidence index rose to 83, which was in line with expectations. The above data show that the US's expectations for the economy and the job market have improved considerably.

However, despite the current economic data in the US, data performance is not yet able to convince the Fed that it will be able to enter the policy tightening cycle ahead of time. This situation will restrict the short-term growth of the US dollar index to a certain extent. Previously, some of the less optimistic markets in the US have yet to be further digested by the market, especially in the first quarter of the year when the GDP data were more noteworthy. In the expectation that the US GDP growth rate will be further revised to negative growth range in the first quarter of this Thursday (May 29th), investors will not be optimistic about the short-term performance of the US dollar index.

In addition, the price of Treasuries from the core market to the peripheral market in the euro area countries is still on the high side on Tuesday, implying that the global investment capital flows are still flowing to the euro area market, which is the reason why the euro exchange rate continues to support. After the successful completion of the general election in Ukraine last weekend, the situation in the country is still far from being completely subsided. Ukraine's interior minister Awako J said in May 27th that dozens of Pro Russian Separatists were killed by Ukraine soldiers in a fierce battle at an important regional airport, which has now returned to government control.

The above situation means that the conflict in the eastern part of the country will continue. Investor The willingness to transfer assets from euro zone high-risk countries to the euro area still exists. Besides Ukraine, the market is concerned about the situation in the Middle East. On the one hand, the situation of bargaining between Libya rebels and the government has kept the international oil market prospect uncertain. The prospect of further initiatives of the new government in domestic and foreign affairs after the Egyptian election has also kept investors cautious.