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Market News Foreign exchange trading reminder on September 14: The U.S. dollar rose to a two-week high, commodity currencies rose, and US terrorist data struck

Foreign exchange trading reminder on September 14: The U.S. dollar rose to a two-week high, commodity currencies rose, and US terrorist data struck

The U.S. dollar index climbed to a two-week high on September 13, boosted by expectations that the Fed may reduce asset purchases before the end of this year, although the number of new crown cases is still increasing. Most resource-related currencies strengthened against the U.S. dollar, and rising energy prices pushed an index tracking commodities to its highest level in six years. US August CPI data will be released on Tuesday

Eden
2021-09-14
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On Monday (September 13), the US dollar index was basically stable in late trading, at 92.61, rising to 92.88 earlier, the highest since August 27. The United States will release a series of economic data this week, starting with the Consumer Price Index (CPI) released on Tuesday, which will provide the latest clues on the fever of inflation before the Federal Reserve meeting next week. According to agency surveys, the CPI may rise by 5.3% year-on-year in August and 5.4% in July.

Philadelphia Fed Chairman Patrick Harker has become the latest policymaker to express his hope that the Fed will begin to reduce debt purchases this year. In an interview with Nikkei, he said that he would like to reduce the scale of asset purchases.

Erik Nelson, a macro strategist at Wells Fargo Securities, said the talk of curtailing debt purchases boosted the U.S. dollar. We have noticed from the Fed’s communication that they hope to decouple debt reduction from raising interest rates, but it takes patience and persuasion and a lot of time for the market to change its response function. At present, the timetable for reducing debt purchases in the market is closely related to the timetable for raising interest rates.

Reducing the size of debt purchases usually boosts the U.S. dollar because it means a step toward tightening monetary policy. This also means that the Fed will reduce its purchases of bond assets, which means that there will be fewer U.S. dollars in circulation.

The Wall Street Journal reported on Friday that Fed officials will seek to agree on a reduction in bond purchases starting in November.

In addition to inflation, the US will also announce retail sales and industrial production data this week. Christopher Vecchio, a senior analyst at DailyFX.com, a research department of foreign exchange broker IG, said that with weak economic data, if the Consumer Price Index (CPI) stays high this week, the Fed may be in trouble because the stimulus measures are normal. The pressure of transformation will increase.

The euro to US dollar fell 0.03% to 1.1811 late. After triggering the stop loss below 1.1800, the exchange rate fell to the support level of 1.1770; Asian traders said that there was alleged selling near 1.1810; the European Central Bank said last week , Will begin to reduce the size of its emergency bond purchases.

The U.S. dollar rose 0.05% to 109.99 against the yen, an earlier rise of 0.2%; corporate buying and mostly weaker Asian currencies brought support. The dollar against the Swiss franc also rose 0.45% to 0.9217.

The pound fell slightly to 1.3838 against the U.S. dollar, and corporate hedging interest provided support to the exchange rate near 1.3840; the U.S. dollar fell 0.35% to 1.2648 against the Canadian dollar.

As the price of WTI crude oil climbed, the Norwegian krone led the rise in the G-10 currency; a strategist at the Nordic Bank of Sweden stated that today’s election in Norway will only cause temporary fluctuations in the Norwegian krone.

John Hardy, head of foreign exchange strategy at Saxo Bank, wrote in the report that Norwegian kroner traders seem to be not worried about the political situation. What they care about is the current oil prices, especially natural gas prices. The US dollar fell 0.4% to 8.6418 against the Norwegian krone; Nordic Union The bank said that history shows that the Norwegian Krone usually strengthened before the Norges Bank raised interest rates for the first time, and then basically fluctuated sideways afterwards.

Preview Tuesday


timeareaindexThe former valuePredictive value
14:00U.KILO unemployment rate for three months in July (%)4.74.6
14:00U.KAugust unemployment rate (%)5.7
20:30AmericaThe CPI annual rate in August has not been adjusted seasonally (%)5.45.3
20:30AmericaNo seasonal adjustment of CPI index in August273273.84
20:30AmericaThe core CPI annual rate in August has not been adjusted seasonally (%)4.34.2
04:30 AMAmericaChanges in API crude oil inventories in the week ending September 10 (10,000 barrels)-288.2
04:30 AMAmericaChanges in API gasoline inventories in the week ending September 10 (10,000 barrels)-641.4
04:30 AMAmericaChanges in API refined oil inventories in the week ending September 10 (10,000 barrels)-374.8


16:00 IEA releases monthly crude oil market report

Summary of Institutional Views


HSBC: Monetary and fiscal policy pressures are expected to drag down the pound


HSBC has long believed that the British pound should go lower against the U.S. dollar. These factors help to consolidate this idea. One of the concerns about the pound is how the British economy will sustain once the support of the British government ends in the second half of this year, but The tax increase will have a more direct impact on the economy, especially because it will fall more obviously on younger, lower-paid workers, who tend to have a higher propensity to consume, which may lead to growth in the UK before 2022 The outlook is even weaker; although quantitative easing (QE) may end this year, the biggest question is when and how quickly the Bank of England Monetary Policy Committee will raise interest rates. The comments of Monetary Policy Committee members Sanders and Mann indicate that The risk tends to be later and slower than the market currently expects; the British pound was the second outstanding currency in the G10 currency in the first half of the year (only lagging behind the Canadian dollar), and if there is any difference, it is the same as the interest rate during this period. Compared with pricing, the market seems to be more optimistic about the pricing of the pound, and this excessive prosperity is accumulating downside risks.

ING: The Australian dollar against the New Zealand dollar saves more downside


ING analysts believe that the New Zealand dollar has outperformed its nearest Australian dollar and most other G10 currencies last week. After a short rebound, it has now fallen to 1.0350. There is more downside for the Australian dollar against the New Zealand dollar. There are downside risks in monetary policy and economic differentiation. The market saw some opportunities to buy the New Zealand dollar to fall. At this time, New Zealand withdrew from the national blockade, and the time for the first interest rate hike by the New Zealand Federal Reserve in October is likely to be approaching. The next week New Zealand’s second-quarter GDP data will be the main bright spot, and we should see a moderate slowdown in quarterly growth, but only a sharp decline can undermine expectations of the New Zealand Federal Reserve’s monetary policy tightening.

Commerzbank: EUR/CHF may plummet to 1.0629


Commerzbank’s technical analysis believes that the euro against the Swiss franc tried to break through its 200-day moving average of 1.0898 last week, but ended in failure. This resistance was the 50% Fibonacci retracement of this year’s decline and 2008-2021. The annual downtrend line 1.0925 is strengthened. This point is still a key resistance level. The initial support level is the 55-day moving average 1.0822. The market outlook may fall below the low point of 1.0700/1.0689 in mid-October last year and further fall to the low point of November last year. 1.0629, thereafter is the 78.6% Fibonacci retracement level of the previous uptrend at 1.0643.

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