The dollar index hovers low Market interpretation focuses on Yellen this week

DXY

The dollar index recorded a sharp decline over the past week, mainly because the Fed's March interest rate hike boots landed, and the FOMC's statement after the rate hike did not have the hawkish expectations of the pace of interest rate hikes during the year, causing the dollar index to fall. In the past two weeks, the dollar index has shown a typical "buy expectations, sell facts" trend, since the first cycle of March, Fed officials have repeatedly advocated the necessity of march interest rate hikes, suddenly pushing the expectation of March interest rate hikes to a high level, the dollar index also opened a wave of rally, to the non-farm Wednesday ADP employment data shined, the dollar index climbed to a high of 102.61. Then on Friday, the number of non-farm payrolls recorded 235,000, continued to be better than expected and previous, almost has set the March rate hike on the board, some dollar bulls also chose to take profits at this time, coupled with the employment data in the wage growth rate there is room for improvement, the dollar index recorded a wave of declines, but almost all rebounded before the Fed announced the interest rate decision on Wednesday, but when the interest rate decision was officially announced, the FOMC's interest rate dot matrix chart did not have the hawkishness expected by the market, and the forecast for at least 3 rate hikes during the year was also frustrated. Yellen's statement in the press conference about the path of interest rate hikes during the year is also more conservative, she said that the three rate hikes will of course be implemented gradually, the Fed did not expect to tighten policy at each meeting, she stressed that the Fed does not have a preset policy path, the decisions of the commissioners depend on the data, and the policy is expected to remain loose for a period of time. The market's interpretation of this is that the Fed's interest rate hike only reflects the recent improvement in THE LEVEL of inflation and employment in the United States, and there is no guarantee for the pace of interest rate hikes during the year, so the dollar is under pressure again, the interest rate decision was announced after the short-term sharp decline, and the downward trend was extended on Friday, the lowest to the 100.13 line, approaching the key support level of the 100-point mark. Yellen will speak again on Thursday, when his statement on U.S. monetary policy will certainly trigger further interpretation in the market, in addition to Yellen, a number of Fed officials will appear this week, including Chicago Fed President Evans, St. Louis Fed President Bullard and New York Fed President Dudley; data, the US February trade data and durable goods orders are worth paying attention to.

AUDUSD

The unexpectedly subdued performance of the labour market has made the Aussie dollar trend less clear, and from the daily chart, On March 15, the Federal Reserve issued a new interest rate decision after Australia and the United States rose sharply to break through 0.76, stood on 0.77, touched 0.771, the unexpected employment data downturn on the 16th made Australia and the United States return to 0.76, 17 in the absence of market data, the bulls again hit 0.771 and still did not form an effective breakthrough, as of last Friday's close, three times to try to break through the 0.771 failed, today's long-short competition around this price is still continuing. It is worth noting that at the G20 summit held in Germany this weekend, US Treasury Secretary Mnuchin agreed that Trump changed his statement of "opposing all forms of trade protectionism" to "reduce international trade imbalances", and his defense said that Trump still supports free trade, but the United States needs "fair and balanced trade", which is in the interests of American workers and US trading partners. Not only that, but several G20 countries, including Britain's Chancellor of the Exchequer Hammond, have shown signs of compromise, saying that "while we like a firm statement about free trade, we also have to look for the right language for agreement." Judging from the tone of speech of various countries, the United States has insisted on free trade for 70 years or will be adjusted, and the so-called "Border-adjustment tax" policy may be implemented in the future, and the eurozone countries have taken a tacit attitude towards this. Although Australian Finance Minister Morris said at the meeting that Australia opposes the ambiguity of the US trade protectionism rhetoric, it will work with other G20 countries to resolutely resist trade protectionism. However, such wording inevitably raises concerns about whether Australia is suspected of taking sides with Europe, especially since the eurozone has now shown a compromise attitude, and Morris has raised the issue of "environmental impact economy", which has nothing to do with the hot topic, which makes its attitude towards trade protectionism more ambiguous. Compared with Morris, former Treasury Secretary Swann's remarks are much more radical, arguing that if the United States stabs the economies of other countries, if the G20 countries do not intervene to stop it, the world will begin to race-to-bottom around trade protectionism, taxation and deregulation, which is extremely negative for the future of the global economy. In view of this, the subsequent movement of the Australian dollar has become elusive, and the overall trend is to be determined until the G20 summit countries reach a clear agreement. From a technical point of view, the current long-short competition around the 0.771 resistance level is more intense, the middle line of the Bollinger Bands has a slight downward trend, the 20-period standard deviation has returned to the middle line, and today you can pay attention to the ANZ consumer confidence data.

EURUSD

Affected by the US interest rate hike, last week on the 15th Europe and the United States ushered in a slight rise, followed by the release of the eurozone PPI on the 16th in line with expectations, and the euro area major countries of the United Kingdom and Switzerland benchmark interest rates have not changed, so that the euro in 1.070-1.078 between the slight shock, 20 standard deviation fell below the middle line. On the 17th, German Chancellor Angela Merkel met with US President Trump, and the cold attitude of the two did not shake hands in front of the media laid the groundwork for the weekend G20 summit. At the G20 summit, most G20 countries, including the United Kingdom, unexpectedly compromised on trump's rhetoric of "reducing international trade imbalances" that Trump considered to be disguised trade protectionism. Compared with other European countries, Germany still has a tougher attitude towards trade protectionism, which is because Germany's export interests in the United States will be greatly reduced due to the real-time border tax adjustment policy of the United States, so Germany still expects to change the status quo in subsequent negotiations. However, judging by the wording of countries, the rest of the eurozone tends to compromise and defend themselves, which makes it difficult to reach an agreement in the negotiations. In the short term, the euro area needs to face the impact of the opening of the Brexit process, on the other hand, it needs to be prepared to face the impact of the implementation of border tax adjustments in the United States, and the euro can be expected to meet a larger shock during the year, and it will be more stable by various economic indicators in the near future, or it will be difficult to break the range shock trend. From the daily chart, the current return of the euro to the Bollinger line, the 20-period ATR reached a historical low, the 20-period standard deviation has an upward trend, and the Bollinger mid-line has also begun to rise, and the possibility of a recent rise is higher.

The above is general information and does not take into account your investment objectives, financial situation and investment needs.