Market analyst James Skinner said the dollar's decline was largely driven by the euro. The euro was boosted by some economic data that helped eliminate some of the economic haze hanging over the continent. The euro exchange rate has been in a downward trend since Brexit, the EU has also been hit by the biggest economic shock in recent years, and now the decline of the dollar has also given the EU a strong dose of stimulant, gradually rising.
International trade and the U. S. general election will be the catalyst for the fall of the dollar by 2020. The development of the international trade situation is good news for both the United States and the global economy, and it may also be beneficial to the dollar in the short term. Fritz Louw, a foreign exchange analyst at Mitsubishi Japan, said the resolution of trade tensions could be beneficial to the dollar as a result of a further fall in the euro against the dollar and a rebound in the dollar's index. Of course, even after the Fed's recent relaxation of monetary policy, the dollar's yield gap is still striking. The interest rate environment may prove to be beneficial to the dollar, and the dollar index is easy to break through 98.00. Fritz L Ouw also noted that the "It turns out that the recent data in the United States is not as bad as people worry about. In fact, the last ISM non-manufacturing survey was either around 54-55 or in 2016, when the U.S. economic growth rate was 1.6%. While this growth was still slowing, it was certain that the market's concerns about the recession would be suspended. We still believe that the DPJ's main White House will be an empty message for the dollar. With the market's increasing attention to the U. S. political situation, the Democrats are still at risk."
On Nov. 6, the dollar index weakened as major competing currencies recovered some of their earlier declines. However, institutions predict that the dollar has limited room for a downward trend and that the weakness is unlikely to last long. Shengbao Bank and Mitsubishi UFJ believe flexible U.S. bond yields will boost the dollar again. However, Mitsubishi JFJ pointed out that the international trade situation and the US election will be the catalysts that led to the decline of the dollar in 2020. If Democrats enter the White House, the dollar will suffer. But the weakness of the dollar will not last long, and the flexibility of US bond yields will limit the decline.
Hadi, an analyst at Shengbao Bank, said the euro reversed sharply against the dollar yesterday, in part because of a strong rise in U.S. yields and hopes that the U.S. economy would avoid recession. For bulls, the current exchange rate is in a disturbing position. The euro has recently rebounded strongly against the dollar, although there is no threat that a correction will continue to rise. However, if the exchange rate closes below 1.1000, it is beginning to imply the disillusionment of bull market hopes. 1.1000 is not only a key psychological level, but also close to the recent 61.8 percent rebound in Fipolachi.
"We are still bullish on the short-term trend of the dollar. We expect the dollar to appreciate against the euro and most currencies by the end of the year, although we continue to see the dollar fall against the yen at the same time. The dollar is overvalued, but we believe that a relatively strong cycle and unresolved global tensions can keep the dollar higher. With 2020 approaching, a potentially less threatening global context could eventually lead to a weaker dollar, "said John Shin,the strategist at Bank of America Merrill Lynch.
On Nov. 6, the dollar fell as the dollar fell, while the euro, pound and yen rose, leaving the dollar index down 0.2 percent. But some analysts said the flexibility of U.S. bond yields would temporarily limit the decline in the dollar index. Dollar and U.S. yields rose sharply on Nov. 5, said John Hardy, chief foreign exchange strategist at Shengbao Bank. Markets, especially emerging markets, are the most complacent, in part because of hopes of easing tensions in international trade. For emerging market traders, however, it is important to note that markets have partially digested the good news of international trade.
(Picture Source:Sogou)
The Fed has said that it will be a positive response to the risk of a threat to its economic outlook, and policymakers have repeatedly said they will take action to "protection of economic expansion", and the third-quarter manufacturing sector is getting more and more difficult. U.S.-silver-in-one Shin said: "The market will avoid the worst-case hope for the U.S.-China trade and the U. K. We are still cautious, especially as the APEC summit is near the end of November, when the progress of trade negotiations may become clearer. As a result, most of our core macro projections remain the same when we enter the next month."
This week, as markets digest a range of trade-related messages, the United States dollar has been fluctuating, and these developments in the trade situation have an impact on the global economy as a whole. The White House may decide not to impose punitive tariffs on cars imported from Europe, for example, in a few days before the U.S. Department of Commerce, Wilbur Ross, said in an interview.
