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market analysis
Fed's interest rate cuts in September, US dollar index maintains fluctuation
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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Decision Analysis]: The Federal Reserve's interest rate cuts in September, and the US dollar index maintains a volatile pattern." Hope it will be helpful to you! The original content is as follows:
On the Asian session on Monday, the US dollar index hovered below the 98 mark, and the market was still waiting for this week's Jackson Hall seminar to provide clues to the Fed's next move. Signs of weakness in the U.S. labor market, xmh100.combined with any inflation caused by trade tariffs, could put the Fed's interest rate cut trajectory in a dilemma.
Analysis of major currencies
Dollar: As of press time, the U.S. dollar index hovers around 97.85. The U.S. dollar jumped last Thursday as data showed that U.S. producer prices increased more than expected in July, but gave up most of the gains on Friday, with the U.S. dollar falling 0.4% against a basket of currencies last week. Judging from the chart of the US dollar index (DXY), the current price is still in the downward channel. The Bollinger Band shows that the price has touched the upper track around 98.66 in the early stage and encountered a strong pullback. The current price has fallen back below 98.00 again. As the price gradually approaches the lower track 97.60 area, the market is full of doubts about the support of this position. The Bollinger Band shows that the current volatility has intensified. Although the price rebounded in a short term earlier, it failed to break through the upper track, which implies that the market is still under pressure. The RSI index shows that the market is currently under the oversold area and has not rebounded effectively, further confirming the existence of downward pressure.
1. Putin and Trump did not reach an agreement
U.S. President Trump said at a joint press conference with Russian President Putin that the two sides have made great progress and reached an agreement on many issues. There are few left to be solved, but one of them is very important and the two sides have not reached any agreement. He will call Ukrainian President Zelensky and NATO leaders and some people he thinks are appropriate to inform the meeting. Trump said he hopes that the United States and Russia can have a good and fruitful meeting in the future and is expected to meet again with Putin soon. Putin said the next meeting may be in Moscow.
2. Russian Ambassador to the United States: Russia and the United States will further consult on the normalization of relations in the near future.
On the 15th local time, Russian Ambassador to the United States Darchiev said that documents on restoring air traffic between Russia and the United States are ready and submitted to the United States for deliberation. Darchiev revealed that Russia and the United States are expected to face tensions in bilateral relations in the near future.Changhua will conduct the next round of consultations, and hopes that specific discussions will be conducted at that time. After the meeting between the two heads of state, Dmitryev, president of the Russian Direct Investment Fund, said that the two sides had a positive and constructive dialogue. He stressed that it is crucial for the US president to note that Moscow and Washington have important cooperation potential in the economic field.
3. Japan will approve the first stablecoin denominated in Japanese yen JPYC
According to Nikkei News, the Japan Financial Services Agency will approve the country's first issuance of the stablecoin denominated in Japanese yen this month. The Japan Financial Services Agency will register the fintech xmh100.company JPYCInc. as a remittance business xmh100.company and it is expected to start selling within a few weeks after registration. The digital currency will be backed by liquid assets such as government bonds to keep its value stable at 1JPYC=1 yen.
4. Israeli army will review the plan to occupy Gaza City within a few weeks or conduct military exercises in Gaza City. Israeli Army Radio reported on the morning of the 17th local time that Israeli general staff chief Zamir will hold a meeting on the same day to review the military's overall plan to occupy Gaza City in the northern Gaza Strip. Israeli Army Radio also quoted sources as saying that the Israeli army will conduct military exercises in Gaza City within weeks, and the Israeli army will require some troops to evacuate from some stations in southern Gaza to vacate relevant areas to accommodate refugees who have moved out of Gaza City. Previously, the Israeli government had instructed the Israel Defense Force to launch a military offensive against Gaza City, and the military then began to carry out military operations in the Zain xmh100.community on the outskirts of Gaza City. 5. Fed Daly: It is more appropriate to cut interest rates by about two times this year.
After the economic report showed that retail sales were stronger than expected last month and wholesale prices unexpectedly jumped, FOMC voter and San Francisco Fed Chairman Daly hinted in an interview in 2027 that she is still preparing to start easing policies as early as next month. Daly said the job market is weakening and the economy is slowing down, but not slowly, and xmh100.compared to inflation that is still above the Fed’s target, “there will be reason to cut interest rates several times at some point this year.” “We will wait for more data, maybe cut interest rates less, maybe more, but in the end, I think twice this year is still a good prediction.” “What I don’t want to do is worry too much about inflation that may rise or continue again, that we are waiting for this situation to be clear without supporting the labor market.”
Institutional View
1. Bank of America: Stock markets are expected to usher in a wave of profit-taking after Jackson Hall meeting
Bank of America strategists pointed out that the record rebound in the U.S. stock market makes it an excellent time for the Fed to take profits when it sends a dovish signal at Jackson Hall meeting. The team led by Michael Hartnett said investors are pouring in risky assets from stocks to cryptocurrencies and corporate bonds as they are optimistic that the Fed will lower interest rates to support a weak labor market and ease the U.S. debt burden. HartnEtt wrote in a note that Fed Chairman Powell released dovish remarks at Jackson Hall meeting could lead to a decline in stocks as investors “buy rumors and sell facts.” He reiterated that he prefers international stocks xmh100.compared to U.S. stocks, a view that he has proven to be correct this year. Hartnett recently warned that stock markets could form a bubble. He believes that as investors seek to fight inflation and hedge against the weakening of the dollar, gold, xmh100.commodities, cryptocurrencies and emerging market assets will be the biggest winners.
2. Fanon: Japan's economy may shrink in the third quarter
Analysts at the Credit Bank of France said in a report that Japanese xmh100.companies are expected to be more cautious about capital expenditures due to the impact of U.S. tariffs and concerns about a global economic slowdown, and Japanese xmh100.companies are expected to shrink in the third quarter from July to September. They say the heat of summer may also make people hesitate about going out and limit the recovery of consumer spending. Analysts expect the Bank of Japan to raise interest rates as early as January 2026. The Bank of Japan's resumption of interest rate hikes may require its belief that the global economy will not decline and that the effectiveness of economic policies will be enough to restore positive growth from the fourth quarter.
3, Barclays: If the Russian-US summit makes progress, the euro and Central and Eastern European currencies will rise Barclays analysts said in a report that if the Russian-US summit makes substantial progress in resolving the conflict between Russia and Ukraine, the euro and Central and Eastern European currencies may strengthen. They said the euro, Hungarian forin, Polish zloty and Czech Krone would benefit the most from any good news, as these currencies are very sensitive to the oil shock on the supply side and that Central and Eastern Europe is close to conflict areas. By contrast, the Swiss franc could fall if progress is made in the direction of the ceasefire due to the Swiss franc's safe-haven position. Norwegian krone and Brazilian real may also be under pressure due to their status as oil-producing countries. The above content is all about "[XM Foreign Exchange Decision Analysis]: The Federal Reserve's interest rate cuts in September, and the US dollar index maintains a volatile pattern". It is carefully xmh100.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support! In fact, responsibility is not helpless, it is not boring, it is as gorgeous as a rainbow. It is this colorful responsibility that has created a better life for us today. I will try my best to organize the article.
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