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The dollar index is competing for long and short, CPI and Jackson Hall meeting are coming

Post time: 2025-08-19 views

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Hello everyone, today XM Forex will bring you "【XM Group】: The US dollar index is qxkkl.cnpeting for long and short, the CPI and Jackson Hall meeting is qxkkl.cning." Hope it will be helpful to you! The original content is as follows:

On the Asian session Tuesday, the dollar index hovered around 98.14, the dollar rose on Monday, U.S. President Trump chaired talks aimed at ending the war between Russia and Ukraine, and traders reduced their bets on September rate cuts before Fed Chairman Powell’s speech on Friday. Traders also looked at Powell's speech at the Fed's annual economic policy seminar in Jackson Hall, Wyoming later this week to look for new signs of a possible rate cut next month. Powell previously said he was reluctant to cut interest rates because Trump's tariff policy is expected to lead to inflation rising this summer.

Analysis of major currencies

U.S.: As of press time, the US dollar index hovered around 98.13. On Monday, the US dollar index was 98.0199, with a slight increase of 0.19% during the day, showing signs of stabilization in the low-level fluctuations. The US bond market is also highly concerned, with the yield curve steepening to its most significant level since October 2021, and the 5-year and 30-year Treasury bond yield gap (5s/30s) widening to 108.3 basis points overnight, setting a new high in recent years. Market sentiment sways between optimism and prudence, the stock market has set new highs and the corporate credit spread has narrowed, reflecting the superficial healthy scene of the US economy. However, Fed policy expectations, geopolitical situations and potential fluctuations in energy prices add qxkkl.cnplexity to the market. Technically, the US dollar index is currently at 98.0199, up 0.19% during the day, but the overall situation is still in a low-level fluctuation pattern. The daily chart shows that the US dollar index is significantly lower than the 50-day moving average (99.0859), 100-day moving average (99.1465) and 200-day moving average (102.9747), reflecting medium- and long-term downward pressure. closeThe future trend fluctuates within the 97-99 range and fails to break through the 50-day moving average in the short term, indicating that the bulls are insufficient momentum.

The dollar index is qxkkl.cnpeting for long and short, CPI and Jackson Hall meeting are qxkkl.cning(图1)

Euro: As of press time, the euro/dollar hovered around 1.1666, and the euro/dollar started the week with a lower stance, down 0.30%. Traders are waiting for the result of a meeting between US President Donald Trump and Ukrainian President Vladimir Zelensky, after Trump met with Russian President Putin last Friday. The EU's economic agenda will include the release of EU inflation data, the August HCOB News PMI and Germany's GDP data. Technically, the upward trend of the EUR/USD stalled on Monday, with traders failing to keep their gains above 1.1700, paving the way for a pullback to 1.1650. If traders break through the latter, they may challenge the 50-day simple moving average (SMA) at 1.1640 level, followed by the 20-day SMA at 1.1628 level. In the case of further weakness, the pair could reach 1.1600 and 100-day SMA at 1.1460 levels. On the other hand, if the buyer pushes the price up, they may test 1.1700. If further strengthening, the key resistance levels are above, which are the highs of 1.1788 on July 24, the 1.1800 mark and the highs of 1.1829 for the year.

The dollar index is qxkkl.cnpeting for long and short, CPI and Jackson Hall meeting are qxkkl.cning(图2)

GBP: As of press time, GBP/USD hovered around 1.3507, GBP/USD performed weakly at the start of the new trading week, and fell by about a quarter of a percentage point at the opening market. The US dollar (USD) cut its overall losses last week, and short-term gains in the pound (GBP) were suppressed on Monday. The week started with a quiet start, with not much important content on the data agenda. However, this will change on Wednesday, with a new round of key economic data releases from the UK and the start of this year's Jackson Hole Economic Workshop hosted by the Federal Reserve Bank of Kansas. Technically, a new round of bearish momentum on Monday puts the GBP/USD on its way to challenge the technical support near the 50-day index moving average (EMA) level 1.3450 again. However, GBP/USD is still firmly in the bull market area, trading at a much higher price than 1.3170 near the 200-day EMA.

The dollar index is qxkkl.cnpeting for long and short, CPI and Jackson Hall meeting are qxkkl.cning(图3)

Summary of news in the foreign exchange market

1. The yield of the UK's 30-year inflation-linked treasury bond hits a new high in 1998

The yield of the UK's long-term inflation-linked treasury bond broke through the bond market collapsed three years agoThe high point at that time reflects the continued decline in market demand for such bonds. The 30-year inflation-linked Treasury yield rose to 2.54%, the highest since 1998 and surpassed its peak in September 2022, when former Prime Minister Trass' economic plan triggered a sell-off from leveraged pension funds. However, unlike the 2022 plunge period when yields soared from negative to historical highs in a few days (76 basis points jumped in a single day), the recent rise is a result of gradual accumulation. This trend reflects a decline in demand for such bonds from fixed-income pension funds, while investors demand higher qxkkl.cnpensation to assume long-term risk.

2. Economist: Powell's statement at Jackson Hall may be more cautious than last year

A year ago, Federal Reserve Chairman Powell clearly led the Federal Reserve to the path of autumn interest rate cuts at Jackson Hall annual meeting. He said at the time: "We do not seek nor welcome further cooling of labor market conditions. Now is the time for policy adjustments." This statement almost undoubtedly indicates that the Federal Reserve will cut interest rates in September, and then indeed lowered interest rates by 50 basis points. This year, the market has fully expected a rate cut in September, but economist Ed Yardeni wrote in the report that Powell's statement may be more cautious. "He is more likely to behave like an owl - stay on the sidelines rather than hawkish or doves," Yardeni said. "Our judgment is that before the September meeting, inflation will be higher than expected and employment data will be better than expected. If this is the case, the Fed may be more cautious in making decisions."

3. Market analysis: If the UK inflation data is higher than expected, the US pound may break through the key resistance level of $1.36 if the UK's inflation data released on Wednesday is higher than expected. "Services industry inflation is expected to remain high with private sector wage growth hovering around 5%. "Effectiveness above expectations will prompt the market to further shrink its bet on the Bank of England's interest rate cuts. LSEG data shows that the market currently only expects the Bank of England to cut interest rates by 15 basis points by the end of the year. Earlier this month, the Bank of England's decision to cut interest rates with a weak majority, qxkkl.cnbined with strong weekly wage growth figures and better-than-expected second-quarter economic growth figures, has prompted the market to cut its rate cut bets.

4. Trump announced the launch of preparations for the "Puze Conference", and the location of the tripartite summit is not determined

U.S. President Trump published a message on social media TruthSocial that he had begun to arrange a bilateral meeting between Russian President Putin and Ukrainian President Zelensky, and the specific location has not yet been determined. Trump said that at the meeting held at the White House, he focused on discussing Ukraine's security guarantees with European leaders, and the relevant safeguards will be implemented in coordination with European countries and the United States. After the meeting, he had a telephone conversation with Putin,The preparations for the Russian-Ukrainian leaders' meeting were launched in a manner. According to Trump's plan, after Putin qxkkl.cnpletes bilateral talks with Zelensky, a trilateral summit between the United States, Russia and Ukraine, including him. At present, US Vice President Vance, Secretary of State Rubio and Special Envoy Witkov are coordinating with Russia and Ukraine.

5. Ukraine’s Foreign Minister: Ukraine tries its best to end the Russian-Ukrainian conflict this year

On August 18, local time, Ukrainian Foreign Minister Sebiga said at a press conference in Kiev that Ukraine is making every effort to end the conflict with Russia this year. Sebiga pointed out that the meeting between U.S. President Trump and Ukrainian President Zelensky in Washington later that day was one of the decisive moments to promote peace. He stressed: "This is a decisive moment. By maximizing diplomatic resources, we have the opportunity to bring fair peace one step closer. Ukraine is doing its best to bring this conflict to an end this year." Sebiga also said that Ukraine hopes that the meeting between Zelensky and Trump on that day can further clarify the details of future security guarantees for Ukraine and promote the preparation of the trilateral summit of Ukraine, the United States and Russia. Sebiga also pointed out that the Washington meeting is expected to help clarify the agenda and time frame of the tripartite summit.

Institutional View

1. Huatai Securities: Maintaining the view that the US dollar faces depreciation pressure in the medium and long term

Huatai Securities Research Report pointed out that it is expected that the moderate tariffs in the third quarter will push up core inflation in the United States, and the market has differences in the increase in inflation and duration. The Fed is likely to restart its interest rate cut cycle in September. Although inflation will rebound in the third quarter, it is expected that the restrictions on the Fed's interest rate cut in 2025 will be limited. Since inflation transmission may not exceed expectations, the short-term rebound in inflation has limited impact on US Treasury yields, but after the implementation of the "Big and US" bill, US Treasury yields are still under pressure. Pay attention to the possible buffers of financial deregulation, expansion of US dollar stablecoins, and changes in US Treasury issuance structure, and maintain the view that the US dollar faces depreciation pressure in the medium and long term.

2. CICC: The Federal Reserve will remain cautious in its decision to cut interest rates and will not cut interest rates significantly

CICC research report stated that the market's pricing of the Federal Reserve's interest rate cut has increased significantly in the recent market, and some internal differences within the Federal Reserve have intensified, with voices that agree with interest rate cuts and advocate waiting and watching. U.S. President Trump, Treasury Secretary Becent Becent and others are also putting pressure on the Federal Reserve to call for a significant reduction in interest rates. But we believe that the actual conditions do not support a significant rate cut. The biggest risk facing the United States is "like stagflation", and rate cuts cannot solve this contradiction. Monetary policy should still focus on stabilizing inflation (expectations) rather than pursuing short-term growth or succumbing to political pressure. Therefore, we judge that the Fed will remain cautious in making a rate cut decision and will not be significantly easing. As employment slowdowns coexist with inflation stickiness, the variables in the monetary policy path will greatly increase.

3. Institutions: As the focus turns to the economic contraction, the New Zealand Fed is expected to resume interest rate cuts

The market expects the New Zealand Fed to cut interest rates this week, and once again launched an easing cycle after signs of stagnation in July. Institutional Investigation22 of the 23 economists said the Fed's Policy qxkkl.cnmittee will cut its official cash rate by 25 basis points to 3% on Wednesday. One prediction will not change. If interest rates are cut, the benchmark interest rate will drop to a three-year low. The Fed held interest rates unchanged last month to assess the rise in inflation, but policymakers are expected to turn their attention to weak economic growth. "We expect the official cash rate (OCR) may remain at a supportive level for some time to stimulate the New Zealand economy. Every interest rate decision before the end of the year may have a practical impact, and the possibility of falling below 3% by the end of the year is increasing."

     

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