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The US dollar rebound encountered a key level! Trump forced Powell to ward off
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Platform]: The US dollar rebound encountered a key position! Trump forced Powell to hold the custody of it." Hope it will be helpful to you! The original content is as follows:
Asian market market
Last Friday, the US dollar index fluctuated, always hovering below the 98 mark. As of now, the US dollar is quoted at 98.
Tariff policy
①Trump said that 30% tariffs were imposed on Mexico and the EU.
②Mexico said that the United States imposed a 30% tariff as "unfair treatment" and negotiations have begun; Mexico launched a dumping investigation on the import of caustic soda in the United States.
③The EU has postponed its tariff countermeasures against the United States until early August; it is reported that the EU plans to further cooperate with more countries that have suffered from the impact of US tariffs.
④ Hassett: Unless the agreement is improved, Trump's latest tariff threat will be implemented.
⑤ Source: Trump's 50% copper tariff will cover refined copper.
⑥Trump: It may hold talks with Brazil on tariffs at some time.
⑦ The United States and India are negotiating trade agreements, intending to reduce India's tariffs to below 20%.
⑧ The US tariff revenue exceeded 100 billion mark for the first time this fiscal year, with a year-on-year increase of 301% to US$27 billion.
This report is an exclusive report for Jinshi Data Diamond VIP members. The contents of the report are quoted from third parties and do not involve investment advice provided by Jinshi Data. Investment is risky, so be cautious when entering the market.
Federal
①Federal Goulsby: The latest tariff threat could delay interest rate cuts.
②The Federal Reserve responded to White House "accusations" that the rise in building renovation costs partially reflects unforeseen construction conditions.
③ "Federal Mouth Bottle": The dispute over building renovation has challenged the Fed's independence again, and interest rates are not expected to be cut this month.
④ Hassett: Whether Trump fires Powell or not, the Federal Reserve’s answer to the renovation of headquarters is the key.
*US-Iran nuclear negotiations
① Iranian Foreign Minister: Iran is carefully evaluating the plan for negotiations with the United States. ② US media said Putin urged Iran to reach a "zero-concentration" nuclear agreement with the United States, but was denied by Iranian media; the Russian Foreign Ministry solemnly refuted: fake news.
Palestinian officials: A new round of Gaza ceasefire negotiations are on the verge of collapse. Officials: Hamas undermines the process of Gaza's ceasefire negotiations.
Summary of institutional views
RBC: U.S. inflation is expected to rise across the board, and the overall CPI annual rate will rebound to 2.6%.
RBC stated that in the United States, the increase in costs caused by the imposition of tariffs will eventually be borne by American consumers. However, this part of the cost may be distributed to the entire supply chain links such as transportation www.xmhouses.companies, wholesalers/manufacturers/retailers, and ultimately only a part will be transmitted to consumer prices. It is expected that the overall CPI annual rate of the United States will rise from 2.4% in May to 2.6%, with a monthly rate of 0.3%; the core monthly rate is expected to rise by 0.2%, with an annual rate of 2.9%.
Morgan Stanley Research Report: After the new Fed chairman takes office, he may tend to...
Putting aside the technical details of the chairman's appointment, whether the market will begin to respond to a outspoken "shadow chairman" still needs to be discussed. The opposing view is that market pricing may be more inclined to reflect history, whereby those appointed for political reasons tend to abandon past loyalty and strive to achieve the agency's legislative mandate after taking office, namely, maximize sustainable employment and stable prices.
This is not to say that the chairman is not important. Although the FOMC needs to vote at every meeting, limiting the Chairman’s ability, there is always room for maneuver. Noisy data is usually the basis for voting, and the chairman is the leader. Furthermore, over time, the change of the Council has made the newly appointed persons increasingly influential on the www.xmhouses.commission. Ultimately, even the choices of (regional) Fed chairmen face the risk of a veto from the Council, which will have an impact on the FOMC as a whole.
At present, the discussion about the “Shadow Chairman” is subtle and probably secondary. I don't think the FOMC's response function will change significantly from now until May. However, over time, more and more likely results will occur.
Deutsche Bank
The US dollar index rose last week. On the one hand, this may be due to the "salamitactic tactic". Unlike April 2, the United States announced one-timeNew tariff rates for all countries were released, but they spent a considerable period last week. Since last Monday, 23 countries have received notices of their new tariff rates, and many have not received notices yet, or may not end up at all. And in most cases, these "new" tariffs are very similar to what was announced on April 2. Three months ago, this was enough to trigger a market sell-off. But since the news was spread one by one, the market seemed to be dealing with it better than in early April.
On the other hand, it may also be the expectation of another "taco" that keeps the market calm. "Trump always retreats" has become a catchphrase among traders, used to describe the fact that Trump usually withdraws high tariffs before they take effect or in the early stages.
This has a great impact on the market. If it is the latter (Trump withdraws tariffs), then if Trump does not retreat this time and the tariffs will truly take effect on August 1, the market may fluctuate considerable. If it is the former, then the market may not react until the fundamental data deteriorates significantly. I expect the dollar to weaken in both cases. However, if there is no "taco" in early August, the trend may be very rapid; and the "Salami Tactics" means that once the fundamentals start to deteriorate, there will be a gradual depreciation.
Dutch International Bank strategist Francesco Pesole
If Federal Reserve Chairman Powell is dismissed or resigned before the end of his term in May 2026, it is likely to trigger a new round of serious downward fluctuations in the US dollar, and the damage caused will continue. The initial reaction may be closely related to the scale of the long-term U.S. Treasury sell-off, although the dollar will face the additional negative impact of a sharp dovish repricing of the Fed rate expectation. The value of the US dollar as a reserve currency is fundamentally dependent on the independence of the Federal Reserve, which means that large amounts of funds flowing out of the US dollar may be justified. For us, this seems like a worse www.xmhouses.combination for the US dollar than “Liberation Day.” As shown in the figure, in weeks, the impact of "liberation day" on the euro/dollar is almost 4 standard deviations. Currently, this standard deviation is 1.1%, which means that the change of the four standard deviations is about 4.4%. Assuming that Powell's exit will have a worse impact on the US dollar than on the "liberation day", the lower estimate of the initial impact on the euro/dollar (volatility) is 4.4%.
The extent of damage to the dollar will then depend on the actual direction the Fed takes under the new chairman. In addition to the obvious negative impact of large-scale or fast-paced rate cuts on the dollar, a drop in U.S. interest rates will make it cheaper to use the dollar for hedging and may lead to greater hedging demand, which will hinder the dollar's ability to benefit from the rebound in U.S. stocks.
The above content is all about "[XM Foreign Exchange Platform]: The US dollar rebound encountered a key position! Trump forced Powell to expose him" and was carefully www.xmhouses.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thankshold!
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