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The market is paying attention to the direction of the central bank's monetary policy. The US dollar index rose on the 29th

2024-07-30

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The market focused on the monetary policy meetings of multiple central banks this week. On the 29th, the US dollar strengthened against a basket of currencies across the board. The US dollar index rose in the overnight market, and the gains expanded in the morning of the same day. Then it fell back and remained in a narrow range. The US dollar index rose at the end of the trading day.

The US dollar index, which measures the US dollar against six major currencies, rose 0.24% on the day and closed at 104.562 at the end of the foreign exchange market.

Foreign exchange broker Monex USA previously said that domestic traders and investors in the United States are paying attention to the Fed's statement on Wednesday this week. It is expected that the Fed will evaluate recent data and convey its willingness to start cutting interest rates in September.

Monex USA said that the pound has fallen against the US dollar in recent days because traders have basically guaranteed that the Bank of England will start cutting interest rates on August 1. Due to the intervention of the Bank of Japan in the market, the yen exchange rate has appreciated by nearly 5%. In addition, market rumors believe that due to the stabilization of the economy, Japanese monetary policy makers believe that there is room for interest rate hikes. The Bank of Japan's monetary policy decision on the 31st may stimulate further strengthening of the yen.

Win Thin, head of global foreign exchange strategy at Brown Brothers Harriman (BBH), a US private bank, said that there are many market events this week. The Federal Reserve is expected to keep interest rates unchanged on the 31st, but will open the door to a rate cut in September. At the same time, the US non-farm payrolls data for July will still show that the job market still supports consumption.

Win Thin believes that the yen is likely to find it difficult to gain further momentum, and the Bank of Japan is likely to release dovish signals while raising interest rates.

Kristina Clifton, senior economist and chief currency strategist at Commonwealth Bank of Australia (CBA), said that if the Federal Reserve has any hints of easing monetary policy, the US dollar against the yen may fall significantly, but if the Federal Reserve is hawkish, it is likely to have little impact.

David Scutt, senior analyst at foreign exchange broker Gain Capital, said that unlike usual, the July Federal Reserve interest rate meeting is seen as one of the more predictable events, and the Federal Reserve may make it clear that it will cut interest rates later, most likely in September. Fed Chairman Powell will set conditions for loose policies, that is, inflation continues to return to the target point, but the more important clue is the extent of interest rate cuts after 2025.

As of the close of the New York foreign exchange market, 1 euro was exchanged for 1.0822 US dollars, lower than 1.0857 US dollars on the previous trading day; 1 pound was exchanged for 1.2864 US dollars, lower than 1.2872 US dollars on the previous trading day.

1 US dollar was exchanged for 153.98 Japanese yen, higher than 153.73 Japanese yen on the previous trading day; 1 US dollar was exchanged for 0.8863 Swiss francs, higher than 0.8836 Swiss francs on the previous trading day; 1 US dollar was exchanged for 1.3852 Canadian dollars, higher than 1.3838 Canadian dollars on the previous trading day; 1 US dollar was exchanged for 10.8267 Swedish kronor, higher than 10.8254 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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The market is paying attention to the direction of the central bank's monetary policy. The US dollar index rose on the 29th

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