Foreign exchange trading reminder on April 27: the US dollar hit a new high for more than two years, and the yen rebounded before the decision of the central bank

时间:2022-07-03 09:26:45 浏览:38

On Tuesday (April 26), the US dollar index rose 0.61% to 102.35, the highest level since March 2020.

The Federal Reserve is expected to raise interest rates by 50 basis points when it meets next week and again in June and July.

Federal funds futures traders expect the Fed's benchmark interest rate to rise to 2.69% from the current 0.33% by the end of the year.

The euro fell 0.69% against the US dollar to US $1.0636, the lowest level since March 2020. It is reported that Russia has stopped supplying natural gas to Poland under the Yamal contract, and the euro fell further.

The euro was hit hard by concerns that the Ukrainian war would impact the economy of the European region and expectations that the European Central Bank would act much slower than the Federal Reserve in raising interest rates.

The dollar fell 0.39% against the yen as the market appeared to be covering short positions before the Bank of Japan ended its two-day meeting on Thursday.

Neil Jones, head of foreign exchange sales for financial institutions in Mizuho in London, said that market sentiment had changed, and some people were worried that government officials might take some measures because they were worried about market weakness.

Investors will pay attention to whether the Bank of Japan will adjust its yield curve control policy.

Japanese Prime Minister Fumio Kishida urged the central bank on Tuesday to maintain its ultra loose monetary policy and not to consider the idea of raising interest rates to prevent the yen from falling further.

Sterling fell 1.31% against the US dollar to US $1.2572 in late trading, the lowest level since July 2020.

Wednesday outlook

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Summary of institutional views

Citigroup: the dollar is expected to remain strong before the FOMC meeting

In the past few weeks, the rise in US bond yields, the strengthening of the US dollar and the downturn in the stock market have been the focus of market attention. At least US dollar funds will flow in at the end of the month in the next few days.

The above three key factors will continue until the FOMC meeting on May 4 at least, and this trend is expected to be maintained before that. Nevertheless, the flow of funds at the end of the month may continue to support the dollar.

Today, the euro faces the threat of further decline against the US dollar, which is inevitable.

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Scotiabank of Canada: the euro may rise to 0.86 against the pound

Our bank believes that the euro will increase against sterling in the next few days, testing 0.85. If the Bank of England suppresses the expectation of raising interest rates in the interest rate resolution next week,

The currency pair will test at least 0.86 further. The euro zone, Germany and Spain will successively announce the latest CPI on Thursday, which may boost the market's bets on the European Central Bank to raise interest rates.

However, due to the decline of energy and gasoline prices in Spain and the fuel tax cut in Germany, the actual data has the risk of large deviation from expectations, which may inhibit the European Central Bank's expectation of raising interest rates (thus depressing the euro)

Former vice chairman of the Federal Reserve: the U.S. recession risk is likely to exceed 50%, and the anti inflation need to raise interest rates by at least 200 basis points

Alan Blinder, a professor at Princeton University who once served as the vice chairman of the Federal Reserve, said that in order to combat excessive inflation, the US central bank needs to raise the benchmark policy rate by "at least" 200 basis points over time.

The Federal Reserve clearly sent a message that it would raise interest rates by 50 basis points at the FOMC monetary policy meeting on May 3-4. "They also sent such a message very clearly - I think they will be more and more clear - this is by no means the end of the tightening cycle... I think,

Interest rates should be at least 200 basis points higher than now. "If inflation does not peak as expected," we may be talking about raising interest rates by more than 200 basis points ". The risk of economic recession "may be higher than 50%, but a real deep recession" is highly unlikely ",

"When I say the probability is greater than 50%, I mean a mild recession.".

Deutsche Bank: the Federal Reserve should raise interest rates to 5%-6%, and the US economy will suffer a severe recession next year

David folkerts Landau, chief economist and research director of Deutsche Bank, and others warned that the Federal Reserve may need to implement the most radical monetary tightening since the 1980s to reduce inflation from a 40 year high, which will lead to a serious recession in the United States next year,

It is expected that the unemployment rate will eventually rise by "several percentage points". "Our conservative view is that the target interest rate of federal funds should go deep into the range of 5% - 6% to curb inflation. This is partly because the reduction of the table can also promote the tightening of monetary policy. Our economic research team believes that its effect is equivalent to two additional interest rate increases of 25 basis points".