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The U.S. dollar rebounds in a V-shape, super central bank week is coming
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Hello everyone, today XM Forex will bring you "[XM official website]: The U.S. dollar rebounds in a V-shape, and the super central bank week is www.xmtraders.coming." Hope this helps you! The original content is as follows:
In Asian trading on Monday, the U.S. dollar index fluctuated near the 97 mark. The U.S. dollar rose last Friday, mainly driven by the nomination of former Federal Reserve Board member Kevin Warsh as the next Federal Reserve chairman and the higher-than-expected increase in the U.S. producer price index. The U.S. dollar index rose 0.79%, recouping some of its earlier losses after a sell-off in the dollar that analysts said was an overreaction.
Analysis of major currency trends
U.S. dollar: As of press time, the U.S. dollar index is hovering around 97.05. Judging from the daily swing chart and the 50-day and 200-day moving averages, the downward trend of the U.S. dollar index has not changed. However, after hitting a high of 99.492 on January 15, the index fell sharply in just 8 trading days to a low of 95.551 on January 27, a drop of nearly 4%, and is now oversold. After hitting a low, the U.S. dollar index entered a consolidation phase, fluctuating within the wide range of 97.286-95.551 formed on Tuesday. In the past three trading days, it has fluctuated around the midpoint of the range of 96.419, and the long and short sides are temporarily in a stalemate.

Euro: As of press time, EUR/USD is hovering around 1.1866. This week’s U.S. economic schedule will include a series of U.S. employment data, speeches by Federal Reserve officials, and January’s ISM manufacturing and services PMI. In Europe, the HCOB flash PMI and PMI in Germany and France, as well as the European Central Bank's monetary policy meeting, may trigger fluctuations in EUR/USD. EUR/USD technical picture shows uptrend heading into 2025It is at risk after the yearly high of 1.1918 and falls further below 1.1850. The Relative Strength Index (RSI) shows momentum turning slightly bearish, which could pave the way for further downside for the pair. In this case, the next support for EUR/USD will be 1.1800, a fall of which could push the pair towards the 20-day simple moving average (SMA) at 1.1743. On the other hand, the first level of resistance for EUR/USD lies at 1.1900. If recaptured, the next key resistance will be 1.1950, followed by the year's high at 1.2082.


1. Israeli media: The United States is willing to negotiate with Iran
Israel’s Channel 12 TV station reported on February 1 that the United States has sent a message to Iran, expressing its willingness to meet with Iran and start negotiations to reach an agreement. The report quoted a senior US official as saying that the Trump administration has conveyed information to Iran through multiple channels and expressed its willingness to hold meetings to negotiate an agreement between the two countries. The report cited two sources as saying that Türkiye, Egypt and Qatar were working to facilitate a meeting between U.S. presidential envoy Witkov and Iranian officials in Ankara, Turkey, in a few days. (Xinhua News Agency)
2. Zelensky: Ukraine, the United States and Russia will hold the second round of trilateral talks on February 4
Ukrainian President Zelensky posted on social media on February 1 that Ukraine, the United States and Russia plan to hold the second round of trilateral talks on February 4 in Abu Dhabi, the capital of the United Arab Emirates. Zelensky said that Ukraine is ready for "substantive consultations" and looks forward to achieving results from the talks.To promote a "genuine and dignified end" to the war as soon as possible. A security working group www.xmtraders.composed of representatives from Russia, the United States, and Ukraine held its first tripartite contact in Abu Dhabi from January 23 to 24. The three parties discussed ending the war and the security conditions required, but did not announce a specific consensus.
3. U.S. Democrats said they would not pass the funding package through fast-track procedures
On January 31, Hakeem Jeffries, the leader of the Democratic Party in the U.S. House of Representatives, said that they would not help the Republicans pass the federal government funding package through fast-track procedures. US media pointed out that Jeffries's statement means that the US government shutdown may last longer than expected. The U.S. Senate passed an appropriation bill for the remaining fiscal years of various federal government departments on January 30, and the bill will be sent to the House of Representatives for consideration. But the House of Representatives is on recess and could vote on an appropriations bill as early as February 2. It is said that the operating funds of many federal departments such as the U.S. State Department and the Pentagon were exhausted on January 30, so the U.S. federal government fell into a partial "shutdown" starting at 0:00 on January 31.
4. Zelensky said that the territorial issue cannot be resolved without direct contact with Putin
Ukrainian President Zelensky said in an interview on January 31 that during the negotiation process, the territorial issue cannot be resolved without direct contact with Russian leader Putin. Zelensky said Ukraine was open to any form of meeting with Russia and the United States and hoped Europe would be involved at some stage of the negotiations. Zelensky pointed out that a tripartite meeting needs to be held first and emphasized that there must be at least some form of contact with the Russian head of state, otherwise the negotiating team will not be able to reach an agreement on territorial issues. (CCTV News)
5. Trump announced a new nominee for director of the U.S. Bureau of Labor Statistics
U.S. President Trump announced on social media on January 30 that he would nominate Brett Matsumoto, a senior economist at the White House Council of Economic Advisers, to serve as director of the Bureau of Labor Statistics under the U.S. Department of Labor to replace the previously withdrawn nominee. Trump said he believed Matsumoto’s expertise would allow him to quickly solve long-standing problems with the Bureau of Labor Statistics. He went on to attack the Bureau of Labor Statistics for letting down American business, policymakers and families by releasing "grossly inaccurate data." According to procedures, Trump’s appointment still needs to be approved by the Senate. Information on the U.S. Bureau of Labor Statistics website shows that Matsumoto has worked as an economist in the Price and Index Research Department of the Bureau of Labor Statistics since 2015. Information on the White House website shows that while Matsumoto serves as a senior economist on the White House Council of Economic Advisers, his position at the Bureau of Labor Statistics is out of service.
Institutional View
1. CICC: In the short term, Warsh’s nomination has limited impact on the path of interest rate cuts
CICC Research reported that in the short term, Warsh’s nomination has limited impact on the path of interest rate cuts, but it may lead to an expected revision of U.S. dollar liquidity, and the depreciation pressure on the U.S. dollar may ease in stages, making speculative assets driven by liquidity more susceptible.to impact. In the medium term, Warsh's proposal faces constraints from within the Federal Reserve, capital markets, and finances, and it is difficult to determine whether it will ultimately succeed. But at the same time, its willingness to adjust policies should not be underestimated. Trump’s “America First” policy thinking may also gradually appear in the Fed’s policy practice in the next few years. Investors should also be prepared for this potential change.
2. Institutions: Warsh is unlikely to threaten the independence of the Federal Reserve
Mark Dowding, chief investment officer of BlueBay Asset Management, said that the market generally expects that Kevin Warsh will provide reasons for a dovish stance, arguing that the productivity gains brought by artificial intelligence will ensure that inflation is under control. As a result, futures markets continue to expect the Fed to cut interest rates twice this year, consistent with expectations over the past few months. Wash may be viewed as less dovish than other potential candidates. Previous www.xmtraders.communications with other Fed members indicate that Warsh is well respected and is unlikely to pose a threat to the agency's independence if he serves as Fed chairman.
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