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Is it difficult to regain US Treasury yields rebounding? Investment Banks Warn "American Exception" Fading, causing the US dollar to lose favor
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Hello everyone, today XM Foreign Exchange will bring you "[XM Group]: Is it difficult to regain US Treasury yield rebounding to save the decline of the US dollar? Investment banks warn that the "US exceptional theory" fades and causes the US dollar to fall out of favor." Hope it will be helpful to you! The original content is as follows:
Asian Market Review
On Tuesday, the US dollar index fell and fell below the 103 mark. As of now, the US dollar is quoted at 102.14.
Trump: I had a pleasant call with the acting president of South Korea, and other countries hope to reach an agreement with the United States.
U.S. Trade Representative: The president will not accept the situation where Wall Street dominates the economy, there are no "exceptions and exemptions" in tariffs, and no negotiation timetable.
The U.S. Customs and Border Protection reiterates that the specific tax rates of each country will take effect at 12:01 a.m. on April 9 (12:01 noon on April 9 Beijing time), and Canada's 25% automobile tariff on the United States will also take effect.
The EU is expected to submit a follow-up response plan for U.S. tariffs early next week.
Indonesia announced that it will reduce import duties on U.S. steel, mineral products and information technology products from 5-10% to 0-5%. Import tax on electronic products, mobile phones and laptops will be reduced from 2.5% to 0.5%.
US media: Trump promised on Monday that he would propose a $1 trillion defense budget proposal for the first time, setting a record.
Trump signed an executive order to promote coal development, seeking to use coal-fired power to lead the development of artificial intelligence.
San Francisco Fed ChairmanDaly: The policy is in a very good state and is moderately restrictive. We can act with caution in our policy.
Chicago Fed Chairman Goulsby: Tariffs that far exceed expectations pose inflation risks, and are worried about returning to the dilemma of the past.
It is reported that Russia and the United States will be held in the next few days.
Summary of institutional views
Risui Bank: Increased U.S. rice imports may become a bargaining chip for Japan's negotiations with Trump
Risui Bank economist Yasunari Ueno said that importing more rice from the United States may be one of the bargaining chips for Japan to seek exemption of Trump's increased tariffs. He said: "Rise rice prices have become a major political issue in Japan, and the general view is that the reason is the tight balance between supply and demand." Importing rice from the United States may help alleviate the pressure on Japanese rice prices. He added: "If the sales price drops too much, it may hit domestic farmers, but in this case the government can provide support." Earlier, the Trump administration said that Japan imposed 700% tariffs on rice imported from the United States, but Japan denied it.
Analyst Haresh Menghani: The enthusiasm for buying yen remains unabated! The US and Japan break below... will reconfirm the bearish outlook
On Wednesday, investors continued to seek safe-haven amid concerns about the global recession caused by tariffs, and the yen buying has not dipped for the second consecutive day. In addition, U.S. President Trump reportedly agreed to meet with Japanese officials after a phone call with Japanese Prime Minister Shigeru Ishiba to initiate trade negotiations, which has heightened optimism about a possible trade deal between the United States and Japan. In addition, the Bank of Japan's expectation that it will continue to raise interest rates amid the widening domestic inflation, also supported the yen. Meanwhile, the Bank of Japan's hawkish expectations are in sharp contrast with the Fed's expectations of a more aggressive rate cut, resulting in a further narrowing of the interest rate gap between Japan and the United States. Investors are currently looking forward tonight's Fed meeting to provide part of the boost to Thursday's CPI data.
Technically, the United States and Japan failed to break through 148 this week and then fell, which was beneficial to the bears. In addition, the daily oscillation indicator remains in the negative area and is still far away from oversold, indicating that the path with the least resistance of the United States and Japan is downward. The sell-off below the 145 mark will reaffirm the negative outlook and expose year-to-date lows near the 144.55 area touched on Monday. Keep an eye on the 144 level.
On the other hand, 146 now seems to limit the momentum of the US and Japan trying to rebound, and the US and Japan need to break through this morning's high of 146.35 to push the shorts to cover and return to 147, and then enter 147.4-147.45. Further gains should allow bulls to regain 148 and test this week's high around 148.15, with an upward break that could turn short-term outlook into bullish.
Barclays: ECB is expected to cut interest rates by 25bp next week
Barclays economists said in a report that the ECB may cut policy interest rates by 25 on April 17The basis point reduces the deposit interest rate to 2.25%. They said the expected decision would be reasonable as inflation continues to slow down, approaching the ECB’s 2% medium-term target, and the downside risks facing economic growth will become a reality. They said the ECB could continue to describe the risks of the inflation outlook as two-way, maintain a cautious attitude, avoid providing policy guidance for future decisions, and adhere to the process of making decisions in a one-session manner. Barclays expects the ECB to cut interest rates by 25 basis points at each meeting until October, when deposit rates will reach 1.25%.
UBS: Advance the euro's forecast to June and raise its short-term target price to...
The US dollar has lost its halo of American exceptionalism from its undisputed market darling at the beginning of the year under strict tariff policies. We expect the dollar to weaken further once market uncertainty begins to fade and the Fed begins to cut interest rates. The rate cut may xmserving.come earlier and larger than previously expected.
Every country hit by U.S. tariffs now have several options: ① Retaliate against tariffs on U.S. goods; ② Negotiate a trade agreement with the U.S. government; ③ Stimulate the economy through fiscal support; ④ Easing monetary policy to curb the impact of tariffs on economic growth. The first option will be the most unfavorable outcome for the xmserving.com market, and all other options will be more favorable to the market. If Europe chooses a third option, it will likely support the euro; but if option 4 is chosen, it may weaken the euro. As for Programs 1 and 2, the impact of the euro is uncertain and depends on the reactions of other countries.
While the EU has not announced its course of action, we expect news about these four options to take the main position in the xmserving.coming weeks. This may cause the euro to rise and fall dynamically based on news and may experience severe fluctuations. However, as U.S. economic growth expectations decline and the Fed cut interest rates faster than expected in 2025, the dollar should face pressure.
After the recent surge in the euro against the dollar, we expect the euro to consolidate around 1.10 until the above plan becomes clearer. We believe that the Fed has greater room for monetary policy easing than the ECB, which should lead to higher economies against the US dollar. The downward technical support for the euro-USD is expected to be 1.0750 and 1.06, while the upper resistance is 1.12 and 1.15. In addition, we have adjusted our short-term forecast to advance the previous euro-dollar 1.10 forecast to June, and raised our target prices for September, December and March 2025 to 1.12, 1.12 and 1.14 respectively.
The above content is all about "【XM Group】: The rebound of US Treasury yields cannot curb the decline of the US dollar? Investment banks warn that the US exceptional theory "fading and causing the US dollar to fall out of favor". It was carefully xmserving.compiled and edited by the editor of XM Foreign Exchange.I hope it will be helpful to your transaction! Thanks for the support!
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