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Market risk appetite improves, US dollar index falls on 10th

2024-07-11

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Due to the overall improvement in risk appetite in the financial market, the US dollar fell against the euro, pound, Canadian dollar and Swedish krona on the 10th, and rose against the yen and Swiss franc. The US dollar index weakened in the overnight market and continued to consolidate weakly on the day. The US dollar index fell at the end of the day.

The US dollar index, which measures the US dollar against six major currencies, fell 0.08% on the day and closed at 105.049 at the end of the foreign exchange market.

On the same day, the prices of international risky assets rose overall, the market risk appetite improved significantly, and the demand for the US dollar weakened.

Federal Reserve Chairman Powell said at a congressional hearing on the 10th that although he had some confidence, he was not ready to conclude that inflation was continuing to fall back to the 2% target.

Karl Schamotta, chief market strategist at Cambridge Global Payments, said Powell took a relatively cautious stance. However, there are enough "dovish" hints in Powell's narrative, which will help improve market risk appetite.

Shamota said the job market is no longer generating inflationary pressures that the U.S. economy is struggling to cope with, a view that is reducing the likelihood of further rate hikes and making a September rate cut a more solid option.

Paula Comings, head of foreign exchange sales at U.S. and Zhong Bank, said Powell still wants to see more inflationary trends, "We will have to see what happens with the consumer price index."

Comings said Powell is still hedging his bets and his position looks very fair and balanced.

The market believes that the U.S. consumer price index for June, which will be released on the 11th, will increase by 0.1% month-on-month, and the core consumer price index is expected to increase by 0.2% month-on-month.

Foreign exchange broker Monex USA said in the morning of the 10th that Powell's speech at the congressional hearing on the 9th did not cause a sharp reaction in the market, and the dollar was generally flat in the morning of the same day. Although Powell will still attend the congressional hearing on the 10th, the market's attention is turning to the U.S. consumer price index to be released on the 11th.

As of the close of New York foreign exchange market, 1 euro was exchanged for 1.0825 U.S. dollars, higher than 1.0813 U.S. dollars on the previous trading day; 1 pound was exchanged for 1.2846 U.S. dollars, higher than 1.2788 U.S. dollars on the previous trading day.

1 U.S. dollar was exchanged for 161.78 Japanese yen, higher than 161.31 Japanese yen on the previous trading day; 1 U.S. dollar was exchanged for 0.8997 Swiss francs, higher than 0.8979 Swiss francs on the previous trading day; 1 U.S. dollar was exchanged for 1.3622 Canadian dollars, lower than 1.3630 Canadian dollars on the previous trading day; 1 U.S. dollar was exchanged for 10.5496 Swedish kronor, lower than 10.5500 Swedish kronor on the previous trading day.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Market risk appetite improves, US dollar index falls on 10th

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