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The U.S. dollar plummeted and oil prices trembled, adding to multiple risks
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange]: The U.S. dollar plummeted, oil prices trembled, and multiple risks were superimposed." Hope this helps you! The original content is as follows:
With the United States and Iran about to hold permanent ceasefire negotiations in Islamabad, Pakistan, on Saturday, the U.S. dollar index fell by about 1.6% this week, the largest weekly decline since January. On Friday, the U.S. dollar index continued to close 0.22% lower at 98.67. During March, as geopolitical conflicts pushed up oil prices, triggered inflation concerns and hit the stock market, the U.S. dollar once rose strongly as a major safe-haven asset. However, since the fragile ceasefire agreement was reached on Tuesday, markets have begun to unwind war-era safe-haven positions, leading to a concentrated sell-off in the dollar.
Non-US currencies generally strengthened. The EUR/USD rose about 1.8% this week, closing at around 1.1730; the GBP/USD rose by about 2%, closing at 1.3470; the risk-sensitive Australian dollar and New Zealand dollar both rose close to 3% against the US dollar. This move clearly shows that investors are betting that the ceasefire in the Gulf region can be maintained and oil shipments will gradually resume.
Foreign exchange market: The U.S. dollar index weakened throughout the week and continued to be under pressure after falling below the 100 mark. On Wednesday, it hit a stage low driven by expectations of a ceasefire, and then turned into a shock. The overall downward trend was obvious. Among non-US currencies, the euro stood firm at 1.17 and broke through the mid-term moving average, the pound rose to above 1.34, and xmaccount.commodity currencies were among the top gainers, while the yen lagged relatively behind and was still oscillating around 159, reflecting the restoration of market risk appetite.
Gold market: Spot gold showed a "high and then fluctuated" trend this week, fluctuating violently but still recording gains for the third consecutive week. Amid the repeated tensions between conflict escalation and ceasefire expectations, the price of gold once exceeded US$4,850 and then gave up its gains, and subsequently tested the US$4,800 mark several times. The driving factors mainly xmaccount.come from the weakening of the US dollar and the market's reaction to the American League after the ceasefire.Betting that the Reserve Bank of China may cut interest rates earlier and more deeply has revived. Spot silver follows the overall recovery of precious metals. Gold and silver closed at $4,749.31 per ounce and $75.88 per ounce respectively.
Crude oil market: International oil prices fluctuate violently. At the beginning of the week, oil prices rose due to Trump's threat to Iran. Later, as the Strait of Hormuz was expected to resume traffic and ceasefire expectations increased, WTI crude oil once plummeted by more than 12% in a single day. Since then, it has repeatedly seen the geopolitical situation and negotiation expectations. The core driver mainly xmaccount.comes from changes in supply expectations in the Middle East.
Weekly News Review
1. A week-by-week summary of the Iran conflict: ceasefire games are repeated, and the United States and Iran will negotiate in Islamabad
This week, the regional situation surrounding Iran has repeatedly oscillated between military conflicts and diplomatic games. The United States, Israel, and Iran are trying to promote a ceasefire in a high-intensity confrontation, but there are obvious differences in the agreement framework, and the conflict has spilled over to key nodes such as Lebanon, Gulf energy facilities, and the Strait of Hormuz, and regional uncertainty continues.
Despite the shaky ceasefire, Pakistani officials insist that negotiations will be held in Islamabad this weekend (April 11) as originally planned. The White House press secretary said that the first round of talks is expected to be held on the morning of the 11th. According to reports, Trump has dispatched Vice President Vance, Special Envoy Witkov and others to Islamabad. A negotiating delegation led by Iranian Parliament Speaker Qalibaf has also arrived. Trump said the outcome of the talks would be clear within 24 hours, and US Vice President Vance expressed confidence that the talks would achieve positive results.
Military operations and reciprocal responses: At the beginning of this week, the United States and Israel focused their attacks on Iran in the fields of energy and infrastructure. Iran responded reciprocally and expanded the scope of its attacks to U.S. military presence in the Gulf and energy facilities of regional countries.
Differences in the ceasefire agreement: There are fundamental differences between the United States and Iran on the conditions of the ceasefire. The core conditions proposed by the United States include stopping uranium enrichment, while Iran proposes reciprocal demands such as asset freeze and insists that the ceasefire must cover the Lebanese front. The text of the agreement itself also differs in key terms in different language versions.
The Lebanese issue has become a core variable: Iran clearly regards "Israel's cessation of attacks on Lebanon" as a prerequisite for negotiations, but the US-led ceasefire framework did not include it in the initial agreement. This has led to repeated obstacles to the ceasefire process. Israel continues to carry out air strikes in Lebanon, while Hezbollah maintains restraint but conflicts recur. The Israeli prime minister said he had directed negotiations with Lebanon.
The game in the Strait of Hormuz: Iran once used blockade or tolls as a bargaining chip. Although it denied a xmaccount.complete closure, it made it clear that ships must obtain permission and implement quantitative restrictions. Shipping data shows traffic is clearly under control. The United States and Europe emphasize "freedom of navigation" and oppose any restrictions on passage. Trump warned Iran not to impose charges, and Iran's supreme leader said he would push management of the strait "to a new stage."
2. The minutes of the Federal Reserve meeting set the tone: no action, leaving the door open for both raising and lowering interest rates at the same time
This week, the signal released by the Federal Reserve has been quite clear: when it canUnder the intertwining of source shock, inflation stickiness and weakening employment margin, its policy stance is shifting from "when to cut interest rates" to "holding no ground first, and then respond in both directions depending on the situation."
Official statement: Cleveland Fed President Hammack said he is inclined to keep interest rates at the current level "for quite some time" and will not rule out raising interest rates again if inflation continues to be higher than the target. Chicago Fed President Goolsby described the inflation alert as approaching "orange light or worse." New York Fed President Williams believes that the current interest rate range is "at the right place," but admits that energy shocks will directly increase overall inflation this year.
FOMC meeting minutes: The minutes set a wait-and-see tone. The vast majority of participants believed that the return of inflation to 2% may be slower than expected and risks have increased. Some officials even advocated adding a two-way statement that "interest rates may also rise" in the statement. The minutes pointed out that if high oil prices persist and are transmitted to core inflation, raising interest rates may become an option; but if conflicts drag down the economy, interest rate cuts may also be needed.
Economic data: The number of people filing for unemployment benefits in the United States rose to 219,000 last week, indicating that the labor market has not deteriorated significantly. Core PCE in February still reached 3.0% year-on-year, indicating that inflation lacked sufficient downward momentum. CPI rose 0.9% month-on-month in March, but core CPI was lower than expected. The surge in gasoline prices contributed to the main increase. Market bets on a rate cut this year have risen.
3. Russia-Ukraine negotiations now have "substantial progress" and differences coexist
Ukraine's chief negotiator Budanov released a positive signal, saying that Russia and Ukraine had made "tremendous progress" on a potential peace agreement and agreed to a temporary ceasefire during the Orthodox Easter period from April 11 to 12.
However, sources close to the Kremlin gave a xmaccount.completely different assessment, saying that negotiations have basically stalled on Ukraine's security issues. Budanov also admitted that the two sides have a tough stance on the territorial issue and a final decision has not yet been made.
4. The probability of the Bank of Japan raising interest rates in April rises to 60%: Oil price shocks and rising wages strengthen policy turning signals
The prospect of the Bank of Japan raising interest rates continues to heat up this week. Based on overnight index swap pricing, the market assesses the probability of an interest rate hike in April at about 60%.
Supporting factors: Japan’s real wages in February increased by 1.9% year-on-year, hitting a new high in recent years. The increase in basic wages was the strongest in 34 years, providing key conditions for the normalization of monetary policy. External voices such as former policy xmaccount.committee members also sent hawkish signals.
Prudent attitude of the central bank: The Bank of Japan pointed out in the quarterly regional economic report that xmaccount.companies are continuing to pass on costs, indicating that inflationary pressure is sticky, but expressed concern about the impact of energy prices. Bank of Japan Governor Kazuo Ueda continued his cautious tone at a congressional hearing, emphasizing that there would be no rush to clarify the path for raising interest rates before it is confirmed that wages and inflation have formed a more solid positive cycle.
5. The China Securities Regulatory xmaccount.commission issued the "Opinions on the GEM" and added a fourth set of listing standards for the GEM
On April 10, the China Securities Regulatory xmaccount.commission issued the "On Deepening the Reform of the GEM for Better Services and New Quality"Opinions on the Development of Productivity", which proposed eight reform measures, marking a new stage of capital market reform.
The most groundbreaking opinion is the addition of a fourth set of GEM listing standards, specifically to provide better financial services for innovative xmaccount.companies in emerging industries and future industries. Two types of enterprises are clearly supported: one is high-quality unprofitable innovative enterprises, and the other is high-quality innovative enterprises in new consumption, modern service industries and other fields.
In terms of the review mechanism, the opinion proposed that the pilot project would require local governments to push information on xmaccount.companies to be listed to the China Securities Regulatory xmaccount.commission and the Shenzhen Stock Exchange as a reference for review, but it was made clear that this does not constitute a necessary procedure for xmaccount.companies to go public.
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