Trusted by over 15 Million Traders
The Most Awarded Broker
for a Reason
market analysis
The Fed's interest rate cut expectations have risen sharply, and the US dollar index is under pressure
Wonderful introduction:
Don't learn to be sad in the years of youth, what xmaccount.comes and goes cannot withstand the passing time. What I promise you may not be the end of the world. Do you remember that the ice blue that has not been asleep in the night is like the romance swallowed by purple jasmine, but the road is far away and people have not returned, where can the love be lost?
Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange]: The Federal Reserve's expectation of interest rate cuts has increased sharply, and the US dollar index is under pressure and downward." Hope it will be helpful to you! The original content is as follows:
On Friday, the US dollar index hovered above the 100 mark. This trading day will usher in the initial value of the University of Michigan Consumer Confidence Index in May, the monthly rate of the import price index in April, the initial value of the total annualized construction licenses in the United States, and the total annualized number of new homes in April. Investors need to pay attention. In addition, we need to continue to pay attention to talks between Ukraine and Russia and pay attention to the news about US President Trump.
Analysis of major currencies
United States dollar: As of press time, the US dollar index hovered around 100.64, down 0.17% during the day. The dollar index may continue to face selling pressure as weak inflation data reduces the possibility of the Fed rate hike and Powell’s warnings xmaccount.complicate policy outlook. With safe-haven funds flowing to the yen and Swiss francs and capital shifting to non-dollar assets, traders may still be reluctant to rebuild long positions in the U.S. dollar. Technically, the market faces resistance at the key point of 101.302 and the 50-day moving average of 101.800. Before breaking through these levels, the dollar index has the least downward resistance, with the next target of 99.391.
1. Economic data collapsed in a total manner: expectations of Fed interest rate cuts have heated up sharply
" Thursday's data created greater space for the Fed's interest rate cuts, and the market formed more dovish expectations." This sentence by Peter Grant, vice president and senior metals strategist at ZanerMetals, revealed the first key driver of the surge in gold. The US economic data for April released on Thursday was "annihilated": the producer price index (PPI) unexpectedly fell by 0.5%, far lower than expected growth of 0.2%, retail sales growth fell from 1.7% in March to 0.1%; manufacturing output fell by 0.4%, far exceeding the expected 0.2% decline. This series of data directly led to violent fluctuations in the US bond market. The 10-year U.S. Treasury yield plummeted 11 basis points to 4.435% on Thursday, the largest single-day drop since March 28; the 2-year yield, which is more sensitive to interest rates, fell by 9.2 basis points to 3.961%. The bond market is voting with real money - an economic slowdown is a foregone conclusion.
2. Japan's economy shrank for the first time in a year. Net trade drag coupled with weak consumption.
Japan's first quarterly real GDP annualized quarterly rate recorded -0.7%, indicating that Japan's economy shrank for the first time in a year. Even before it could bear the impact of Trump's tariff measures, its vulnerability was fully revealed. After a sharp boost in the previous quarter, a decline in exports and a surge in imports have caused net trade to drag the economy in the first three months of this year. Consumer spending, which accounts for about half of the total economyExports remained basically the same, while consumption remained lower than pre-epidemic levels as inflation weakened its purchasing power. The shrinkage could also spark ongoing political debate about whether tax cuts or cash subsidies need to be implemented before the Senate election this summer.
3. Fed Barr: Supply chain disruptions may lead to higher inflation
Fed Barr said that the U.S. economic foundation is solid, but he warned that tariff-related supply chain disruptions may lead to slowing economic growth and rising inflation. Barr stressed the importance of small businesses and their role in supply chains and in the overall economy. He said trade policy cast a shadow on the outlook and added uncertainty. Potential supply chain disruptions are “especially severe” for small businesses, partly because they have fewer opportunities to obtain credit. He added that small businesses often provide professional inputs that are not readily available from elsewhere, and business failures can further disrupt supply chains.
4. The negative impact of tariffs may surface in the United States. Colin Graham, head of multi-asset strategy at Robeco, said in a report that the harmful effects of tariffs may become obvious in the United States. Recent data released do not fully reflect the impact of tariffs. There is evidence that American consumers are driving spending ahead of schedule and xmaccount.companies are already stocking up before tariffs arrive. In due course, the overall impact “will begin to show up.” 5. The core inflation indicators favored by the Federal Reserve in April are expected to improve
The core inflation indicators favored by the Federal Reserve may fall to their lowest level since 2021 in April data. Panson Macro and Capito macroeconomics estimate that excluding volatile food and energy prices, the core PCE annual rate may drop from 2.6% in March to 2.5% in April. This will be the lowest level since March 2021, just before the pandemic-era inflation surge really begins.
Institutional View
1. Strategist: The weak dollar is a sign of cross-border investor flows
NeubergerBerman's strategist said in a report that the recent weakening of the dollar seems to be a sign of cross-border investor flows. "These capital flows are likely to be related to the prospect of a slowdown in U.S. economic growth, but may also coincide with the recovery of U.S. risky assets." U.S. risky assets rose as U.S. dollar investors turned back to the stock market from Treasury bonds. However, if non-dollar investors take greater risks while staying away from the U.S. market, there will be no funds back into the U.S. dollar assets. This means U.S. stocks are up, but the dollar remains weak. NeubergerBerman expects the dollar to fall further 3%-5% against the euro and yen this year, but volatility is expected to increase.
2. Mitsubishi UF: Pound responds cautiously to strong UK GDP data
Mitsubishi UF analyst Derek Halpenny said in a report that the pound responded to the improvement of UK economic growth data, indicating that the data wasThe interpretation is more cautious. The data showed that the UK's economy grew by 0.7% in the first quarter, but this was driven by instability in corporate investment. This could mean investors will remain cautious about their over-interpretation of the first-quarter data. In view of the tariff measures announced in April, the Bank of England saw the risk of slowing economic growth and should further cut interest rates.
3. Deutsche Bank: The Federal Reserve may not cut interest rates until December
Analysts at the Deutsche Bank Research Center said in a report that the Federal Reserve may keep the policy interest rate unchanged before the December rate cut and then further relax policies next year. "Our basic assumption remains that the next rate cut is in December, followed by two more rate cuts in the first quarter of 2026, at 25 basis points each." Analysts said the easing of tensions between China and the United States reduced the risk of further deterioration of the U.S. labor market, but other tariff measures could keep inflation at unset levels.
The above content is all about "[XM Forex]: The expectation of a Fed interest rate cut has increased sharply, and the US dollar index is under pressure and downward". It is carefully xmaccount.compiled and edited by the editor of XM Forex. I hope it will be helpful to your trading! Thanks for the support!
After doing something, there will always be experience and lessons. In order to facilitate future work, we must analyze, study, summarize and concentrate the experience and lessons of previous work, and raise it to the theoretical level to understand it.
Disclaimers: XM Group only provides execution services and access permissions for online trading platforms, and allows individuals to view and/or use the website or the content provided on the website, but has no intention of making any changes or extensions, nor will it change or extend its services and access permissions. All access and usage permissions will be subject to the following terms and conditions: (i) Terms and conditions; (ii) Risk warning; And (iii) a complete disclaimer. Please note that all information provided on the website is for general informational purposes only. In addition, the content of all XM online trading platforms does not constitute, and cannot be used for any unauthorized financial market trading invitations and/or invitations. Financial market transactions pose significant risks to your investment capital.
All materials published on online trading platforms are only intended for educational/informational purposes and do not include or should be considered for financial, investment tax, or trading related consulting and advice, or transaction price records, or any financial product or non invitation related trading offers or invitations.
All content provided by XM and third-party suppliers on this website, including opinions, news, research, analysis, prices, other information, and third-party website links, remains unchanged and is provided as general market commentary rather than investment advice. All materials published on online trading platforms are only for educational/informational purposes and do not include or should be considered as applicable to financial, investment tax, or trading related advice and recommendations, or transaction price records, or any financial product or non invitation related financial offers or invitations. Please ensure that you have read and fully understood the information on XM's non independent investment research tips and risk warnings. For more details, please click here
CATEGORIES
News
- 【XM Decision Analysis】--GBP/USD Forex Signal: Driven by US Dollar Weakness
- 【XM Group】--USD/JPY Analysis: Eyes on Japanese Intervention Levels
- 【XM Group】--Ethereum Forecast: Eyes $3,600 Break
- 【XM Market Review】--BTC/USD Forex Signal: Hammer Candle Points to a Bitcoin Rebo
- 【XM Group】--CAD/CHF Forex Signal: Tests Key Resistance