(Original title: Weekly review: The US dollar has reached the top this week, where will the foreign exchange market go next week?)
Huitong Finance APP—— This week, the US dollar showed a strong momentum in the global foreign exchange market, thanks to the positive performance of the US economic data and the steady policy of the Federal Reserve. At the same time, the dovish stance of other major central banks contrasted with that of the Federal Reserve, further enhancing the attractiveness of the dollar. Euro, British pound, Japanese yen and other currencies have different performances, which are affected by their own economic and political factors. The US dollar remains strong, with significant differences in global monetary policy
This week, the strong performance of the US dollar in the global foreign exchange market was mainly due to the strong performance of the US economic data and the relatively stable monetary policy stance of the Federal Reserve. In June, corporate activity in the United States hit a 26 month high, the employment market rebounded, and price pressures eased. These factors together supported the strength of the dollar. At the same time, the dove tendency of other major central banks is in sharp contrast with the Federal Reserve, which further highlights the attractiveness of the dollar. USD Index Performance and Analysts' Opinions
The dollar index rose 0.2% this week to close at 105.81, rising 0.41% overnight, reversing this week's decline. Thierry Wizman of Macquarie expects that the US dollar will continue to strengthen as political uncertainty in Europe may weaken business and consumer confidence. Erik Nelson of Wells Fargo Bank pointed out that before the French election, the foreign exchange market was hesitant to promote the big market, and the French election was the biggest focus of the European foreign exchange market. Euro performance analysis
EURUSD was flat at $1.0697 this week. The service industry activity in France shrank and the economic activity in Germany slowed down, and the market was more worried about the financial stability in the euro area. Analysts warn that the euro has not fully absorbed the serious threat to financial stability in the euro area. Sterling technical analysis and analysts' views
The pound was flat at $1.2649 this week, close to its lowest level since mid May. The Bank of England kept interest rates unchanged this week, but some policymakers said that the decision not to cut interest rates was "delicate balance", which left room for the interest rate cut expected in August. Japanese yen market dynamics and analysts' views
The US dollar hit an eight week high against the Japanese yen this week, and rose 0.4% to 159.59 yen in late trading. Matt Weller of StoneX regards the yen as the focus of the foreign exchange market next week, especially after the US Treasury Department has listed Japan on the watch list that may be identified as a currency manipulator. Canadian dollar performance analysis and analyst views
The Canadian dollar performed relatively strongly this week, but was limited by the depressed industrial and raw material prices in May. Canada's core retail sales data in April was better than expected, but the market's bet on further interest rate cuts by the Bank of Canada has not changed. Stuart Paul, an analyst, said that the growth of retail sales in Canada in April could not prevent the market from betting on further interest rate cuts by the Bank of Canada. Future outlook of the US dollar
Although US economic data showed some signs of weakness, such as real estate data and retail sales data, the latest PMI data for June was better than expected, indicating a broad improvement in the economy. Chris Williamson, chief business economist of global market intelligence at S&P, said that PMI data showed that the economic growth rate of the United States in June reached the fastest level in more than two years, and the second quarter will usher in an encouraging strong growth, while the inflation pressure has also cooled. Outlook for other currencies
euro Political uncertainty and economic slowdown in the euro area may continue to put pressure on the euro. However, if the French election results are conducive to market stability, the euro may find some support. pound The Bank of England's monetary policy decisions and domestic economic data will be the key factors affecting the trend of sterling. If the expectation of interest rate cut weakens, the pound may get some relief. Japanese yen The Bank of Japan's policy decisions and the US Treasury's monitoring list will have an important impact on the yen. If the Japanese authorities take further action to support the yen, they may see a rebound in the yen. List of key events next week
The strong position of the US dollar is unlikely to change in the short term, especially in the context of continued strong US economic data and a relatively hawkish Federal Reserve. However, the trend of other currencies will be affected by their respective central bank policies, domestic economic data and global political events. Investors should pay close attention to these factors to make wise investment decisions.
