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The U.S. dollar index weakens as the market awaits heavy U.S. data
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Hello everyone, today XM Forex will bring you "[XM Foreign Exchange Official Website]: The U.S. dollar index is weak, the market is waiting for heavy US data". Hope this helps you! The original content is as follows:
In Asian trading on Wednesday, the U.S. dollar index fluctuated slightly. The U.S. dollar index fell 0.59% to 99.96 on Tuesday, as the market hoped that the war between the U.S.-Israeli coalition and Iran might not last as long as expected. It was previously reported that U.S. President Trump said he was willing to end military operations against Iran even if the Strait of Hormuz is still basically closed.
Analysis of major currency trends
U.S. dollar: As of press time, the U.S. dollar index is hovering around 99.81. Supported by the safe-haven demand caused by conflict uncertainty, the U.S. dollar still has its best quarterly performance since the third quarter of 2024, rising 2.35% in March, the largest monthly increase since July. Scotiabank strategists point out that although the dollar is currently overvalued, it will remain supported as long as war concerns curb risk appetite and stock market volatility remains high. Iran's Revolutionary Guards subsequently threatened retaliation against U.S.-owned xmaccount.companies. The market is also paying attention to the March employment report to be released on Friday. If the labor market deteriorates sharply, it may reignite expectations of a rate cut by the Federal Reserve.



1. The probability of the Federal Reserve raising interest rates in December rose to 12.5%, and the probability of cutting interest rates rose to 39.5%
According to CME "Fed Watch": The Federal Reserve will raise interest rates in April The probability of the Fed cutting interest rates by 25 basis points is 1.6%, and the probability of keeping interest rates unchanged by June is 3.9%. The probability of keeping interest rates unchanged is 94.6%, and the probability of the Fed raising interest rates by 25 basis points cumulatively is 1.5%. The probability of a 25 basis point interest rate cut is 39.5% (the previous day was 14.1%), the probability of keeping interest rates unchanged is 48% (the previous day was 82%), and the cumulative probability of a 25 basis point interest rate hike has risen to 12.5% (the previous day was 4%)
2. Trump said Iran. The war will end soon and the Strait of Hormuz will "automatically open"
According to the New York Post, Trump said in an interview on Tuesday that he believed the war with Iran could end soon and other countries could reopen the Strait of Hormuz on their own. "We won't be there for long. We are xmaccount.completely destroying them right now," Trump said in a phone interview. Trump said the Strait of Hormuz has been closed by Iran for 31 days, causing global energy prices to soar, while other countries can solve the problem on their own. "I think it will reopen automatically, but my attitude is that I have destroyed this country and let the countries that use the strait open it themselves... because I think the people who control the oil will be very happy to reopen the strait. "I don't think about it, to be honest," Trump said when pressed about a Wall Street Journal report that he was willing to end the war without reopening the strait. My only mission is to make sure they don't have nuclear weapons. They won't have nuclear weapons. When we leave, the channel opens automatically. ”
3. Iran said it used drones to attack technology xmaccount.companies in Israel
On March 31, local time, the Iranian army issued a statement saying that in response to Israeli and US attacks on Iranian infrastructure, since that dayIn the early morning, Iran dispatched attack drones to attack the xmaccount.communications, telecommunications and industrial centers of Siemens and AT&T located at Israel's Ben-Gurion International Airport and the Haifa area. The statement stated that the Siemens Industrial Software Center located in central Israel (around Ben-Gurion Airport) provides the Israeli army with cutting-edge technologies such as artificial intelligence and industrial automation to optimize weapons production lines and military design systems. The AT&T Telecommunications Center in Haifa is a U.S. research and development center that provides advanced network technology, cloud xmaccount.computing and artificial intelligence services to the Israeli military. (CCTV News)
4. Iran’s Foreign Minister: No negotiations with the United States but there is information exchange
On March 31, local time, Iranian Foreign Minister Araghchi said that the current situation is “not a negotiation” but an exchange of information through direct channels or “regional friends.” Iran still receives information from US representative Witkov, but this does not mean that negotiations have started. The relevant exchanges are mainly "warnings or exchanges of views." He pointed out that Iran is currently not negotiating with any specific party, and the exchange of information is carried out by the Ministry of Foreign Affairs under the coordination of security agencies, and is promoted strictly within the official framework under the supervision of the government and the Supreme National Security Council. Araghchi emphasized that Iran has not made any response to the 15 proposals put forward by the United States, nor has it made any proposals or conditions. Iran has not yet made a final decision on the principles of negotiations, but Iran's conditions for ending the war are "very clear": Iran "will not agree to a ceasefire" but demands a "complete end to the war in the entire region." When talking about the regional situation, Araghchi said that "the Iranian people cannot be threatened" and the US president must respect the Iranian people. The Strait of Hormuz is "fully open" and closed only to parties involved in the war against Iran. Iran has taken all necessary measures to ensure the safe passage of ships from friendly countries through the strait. He pointed out that the Strait of Hormuz can become a "peace passage" and its final direction depends on the decisions of the coastal countries. Araghchi concluded by stressing that Iran was "ready to deal with any ground conflict" and warned its enemies not to make mistakes in strategic calculations. (CCTV News)
5. The United Kingdom announced that it will dispatch additional air defense forces to the Gulf region
The British government issued a statement on March 31 that as the situation in the Middle East continues to be tense, the UK will dispatch additional air defense forces to the Gulf region, including extending the deployment of "Typhoon" fighter jets in Qatar and deploying the "Sky Sword" air defense system to Saudi Arabia. According to the statement, British Defense Secretary John Healey recently visited Saudi Arabia, Qatar and Bahrain and held talks with leaders and defense officials of the three countries on issues such as conflicts in the Middle East, the situation in the Strait of Hormuz, and security cooperation between the UK and Gulf countries. The British side will deploy the "Sky Sword" air defense system to Saudi Arabia. Relevant equipment and operators will be in place this week, including radars, control nodes, missile launchers, etc. The UK also announced that the lightweight multi-purpose launch system has arrived in Bahrain; the land-based air defense missile system "Quick Sentinel" has arrived in Kuwait, and the British Air Force's drone early warning and detection system has also been put into operation in the country.
Institutional view
1. Capital Economics: Euro zone inflation data does not provide many clues to future trends
Capital Economics economist Andrew Kenningham said in a report that although euro zone inflation recorded the largest monthly increase since the end of 2022, these data do not provide a clear signal about how much prices will rise and how energy prices will be transmitted to broader inflation indicators. Headline inflation rose to 2.5% in March from 1.9% in February, driven almost entirely by rising fuel prices. There is a high degree of uncertainty about the extent of the transmission of energy prices to core and services inflation, as well as the ECB's policy response function. Kenningham expects headline inflation to rise to close to 4% and core inflation to close to 3% by the end of 2026, but much will depend on the duration of the Iran war. He said both indicators may fall again in 2027.
2. S&P Global: The European and British central banks may raise interest rates in April to respond to energy inflation
Paul Watters, head of European credit research at S&P Global Ratings, said that the European Central Bank and the Bank of England may raise interest rates as early as April to respond to inflation caused by energy supply shocks. He said: "The European Central Bank and the Bank of England will not ignore this inflationary shock." The core inflation in the euro area and the United Kingdom is above 2%, which is beyond the level acceptable to the central bank, so the possibility of raising interest rates is higher. LSEG data shows that the market currently expects the probability that the European Central Bank and the Bank of England will each raise interest rates by 25 basis points at their next policy meeting on April 30 is slightly above 60%.
3. xmaccount.commerzbank: Eurozone inflation is lower than expected and the ECB’s interest rate hike path may be weaker than market expectations
Vincent Stamer, an analyst at xmaccount.commerzbank, said in a report that Eurozone inflation is lower than expected, which means that the number of interest rate hikes by the European Central Bank this year may be less than what the market is currently pricing. Eurozone inflation rose to 2.5% in March from 1.9% in February, but was lower than consensus expectations. Stamer said the current inflation path is closest to the European Central Bank's dovish scenario on the impact of the Iran war, which sees inflation just above 3% in the second quarter. The other two scenarios assume significantly higher energy prices. "This shows that there is currently no support for the European Central Bank to raise interest rates as many times as the market expects." Stamer predicts that the European Central Bank may raise interest rates once in April, or at least send a signal to raise interest rates in June.
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