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The dollar index rebounds to around 99.50, and the minutes of the Federal Reserve meeting strike
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Decision Analysis]: The US dollar index rebounds to around 99.50, and the minutes of the Federal Reserve meeting are xmserving.coming." Hope it will be helpful to you! The original content is as follows:
On the Asian session on Wednesday, the US dollar index hovers around 99.48, and the rest of the week will be dominated by US data. The latest minutes of the Federal Reserve's (Fed) meeting will be released on Wednesday, with first-quarter U.S. gross domestic product growth data scheduled to be released on Thursday. Friday will end the trading week with the US Personal Consumer Expenditure Price Index (PCE) inflation data in April, with markets hoping that key inflation indicators will continue to ease before the Trump administration’s tariff policies start to affect the main data sets.
Analysis of major currency trends
Dollar: As of press time, the U.S. dollar index hovers around 99.48, and is pushing upward as market participants react to weaker trade tensions. The market has gained new optimism from President Trump's decision to postpone the implementation of a 50% tariff on EU imports. Although the short-term rebound has brought some relief to the dollar bulls, the overall technical structure is still downward and the momentum indicator is still working hard to turn bullish. Technically, the Relative Strength Index (RSI) rebounded slightly after a decline last week, but was still below 50, indicating that buyers are not in control yet. Similarly, the moving average convergence/divergence (MACD) indicator is still in the negative range, and the signal line shows no signs of bullish crossing. The lack of confidence in both indicators suggests that despite the current rebound, the market still tends to sellers.
1. Trump: If Canada is "recruited", it can save $61 billion in Golden Dome defense funds
Trump said on TruthSocial that Canada hopes to join our very brilliant Golden Dome defense system. I told Canada that if they continue to be an independent but unequal country, (joining the Golden Dome system) will cost $61 billion, but if they become our beloved 51 state, they don't need to spend a penny. They are considering this proposal!
2. Florida signs a bill to recognize gold and silver as legal tender
On Tuesday local time, Florida Governor Ron DeSantis signed legislation to recognize gold and silver as legal tender in the state, he said the move was to protect Floridans from the depreciation of the dollar. The legislation establishes a legal framework that recognizes certain gold and silver coins as Florida’s fiat currency, exempts sales taxes, regulates its custodians, and allows the arbitrary use of gold and silver in transactionsCoins (requires approval of the legislature to implement the rules). DeSantis said the bill authorizes check cashing or payment agencies such as PayPal and accept payments from gold and silver. DeSantis noted that "this means that these precious metals can once again start to function like real currencies, not just investment vehicles for the rich." DeSantis also criticized the spending behavior of the U.S. federal government, likening the dilemma of "DOGE and Musk" to "fighting the swamp." DeSantis said, "It was the end of May, and Congress did not implement a penny DOGE (budget) reduction! DOGE fought against the swamp, and so far, the swamp won."
3. South African President: Trump agreed to the US attend the G20 summit
South African President Ramaphosa recently said that US President Trump agreed to the US to attend the G20 Leaders' Summit held in South Africa in November this year. Ramaphosa paid a working visit to the United States from the 19th to the 22nd of this month and held talks with Trump at the White House on the 21st. In a weekly routine briefing on the 26th, Trump agreed that the U.S. will continue to play an important role in the G20, including the U.S. attending the G20 Leaders' Summit in Johannesburg, South Africa later this year, when South Africa will hand over the G20 presidency to the U.S.
4. There are additional conditions for the Japanese iron-making merger case. The Trump administration is expected to obtain "gold stocks" of US steel.
The US government is expected to obtain a "gold stock" right from US steel xmserving.companies, which is one of the conditions for the authorities to approve Japanese iron-making to acquire the steel xmserving.company. The arrangement would give the U.S. government a factual veto on xmserving.company-specific decisions, according to people familiar with the matter. Last Friday, Trump announced a "cooperation relationship" between Japan's iron and US steel, including $14 billion in new investment in the United States. It is still unclear the specific scope of the veto, nor is it clear whether the government has made a decision on the $14.1 billion acquisition deal. The deal submitted to the US Council on Foreign Investment (CFIUS) and the president include an original all-cash acquisition price of $55 per share, as well as an additional $14 billion investment, two people familiar with the matter said.
5. Mexico will begin review of the US-Mexico-Canada trade agreement at the end of September or early October
Mexico Economic Minister Marcelo Ebrard said on Tuesday that Mexico is expected to officially start a planned review of the trilateral trade agreement with the United States and Canada at the beginning of the fourth quarter of this year. The US-Mexico-Canada Trade Agreement (USMCA) was negotiated during the first term of U.S. President Trump, replacing the North American Free Trade Agreement (NAFTA) in 2020, requiring the three countries to conduct a joint review six years later. Ebrard had previously said he expected the review to begin in the second half of this year, ahead of schedule. Trump has been pushing for early renegotiation of the agreement and demanding better terms of trade with all of his business partners.
Institutional Views
1. Saxo Bank: US FinanceThe Ministry needs to pay attention to the risks of the Japanese government bond market
John Hardy, global head of macro strategy at Saxo Bank, pointed out in a report that the US Treasury Department should pay attention to the dynamics of the Japanese government bond market. The global head of macro strategy said: "Japan's Ministry of Finance is being forced to speed up its action because its debt situation is even more severe." He said it is impossible to tell whether the United States will eventually face a similar situation. Last week, Japan's ultra-long-term bond yields jumped, and investors expect the Ministry of Finance to adjust its bond issuance structure and turn to issuing more short-term bonds and reduce the issuance of ultra-long-term bonds.
2. Economist: The recent rise in the pound is reasonable.
Ebury economist Enrique pointed out in a report that given the Bank of England's gradual interest rate cut, the recent rise in the pound is reasonable. He said that last week's inflation data was higher than expected, confirming the need for the Bank of England to be cautious about interest rate cuts. The UK is relatively free from US tariffs, the prospect of approaching relations with the EU, and the resilient demand for the UK economy, which also provides support for the appreciation of the pound.
3. Mitsubishi UF: There may still be room for the depreciation of the yen
Mitsubishi UF analyst Derek Halpenney pointed out in a report that the depreciation of the yen may be limited due to a sharp decline in Japan's long-term government bond yields. Market speculation that Japan is considering adjusting its bond issuance plan to support ultra-long-term bonds, an expectation that results in lower yields. Halpenney said there may still be room for the yen to depreciate given the extent of the decline in yields. But he also pointed out that the yen buying could reenter the exchange rate when the exchange rate weakens, given the weak dollar sentiment, President Trump’s unpredictable trade policy, and the prospect of the Federal Reserve’s possible rate cuts later this year.
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