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Dollar hits six-month high as safe-haven demand offsets rising interest rate cut bets
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Hello everyone, today XM Forex will bring you "[XM Forex]: Safe-haven buying offsets rising interest rate cut bets, and the US dollar hits its highest level in six months." Hope this helps you! The original content is as follows:
The U.S. dollar index remained volatile in Asian trading on Monday, and the U.S. dollar exchange rate weakened against the yen last Friday. The main reason was that the Japanese Finance Minister issued a strong warning about "excessive volatility" in the foreign exchange market, suggesting possible intervention, which prompted traders to take profits from short positions in the yen. Despite this, the yen still fell by more than 1% last week due to the huge early decline last week.
Analysis of major currency trends
U.S. dollar: As of press time, the U.S. dollar index is hovering near 100.26. The U.S. dollar index showed strong resilience last week. From Monday to Thursday last week, the index showed a trend of rising for four consecutive days, reaching its highest level since late May. Although it gave back some of its gains on Friday due to the xmniubi.comments of some Federal Reserve officials, it still closed at 100.2037, with the weekly increase locked at 0.93%. Technically, the U.S. dollar index continues to test the key resistance level of 100.39. If it can effectively break through this level, it will further point to the high of 101.977 on May 12. The exchange rate is still above the 200-day moving average (99.885), and buying remains dominant. The 50-day moving average dominates the main trend direction, and the specific point has not been disclosed.



1. According to people familiar with the matter: Ukraine seeks "NATO-style asylum" from the United States
According to people familiar with the matter, Ukraine and its European allies insist that discussions on any territorial exchange with Russia can only be initiated after a ceasefire along the current line of contact. Europe's "counter-proposal" to the U.S. 28-point peace plan clearly puts forward three core demands: First, it requires the United States to provide security guarantees modeled on the collective defense provisions of Article 5 of the North Atlantic Treaty; second, it advocates the use of frozen Russian assets for Ukraine's reconstruction and war xmniubi.compensation; third, it clearly rejects Russia's request for Ukraine to cede unoccupied eastern areas. The "counter-proposal" also stipulates that the solid security guarantee provided by the United States will be xmniubi.compensated accordingly; unless Russia agrees to bear xmniubi.compensation for war losses, its frozen assets will remain frozen. If Russia xmniubi.complies with the terms of the agreement, other sanctions will be lifted in stages and Russia will gradually return to the global economic system. As Europe puts forward counter-proposals, the United States, UkraineNational security advisers from the Netherlands and other European countries will gather in Geneva on Sunday to discuss a quick solution formed under the continued push of former US President Trump.
2. The UK confirmed that it will host the G20 Summit in 2027
On the 22nd local time, the British Prime Minister's Office issued a statement stating that the UK will host the G20 Summit in 2027. The summit will strengthen the G20's focus on achieving stable global growth, fair trade and investment. The statement stated that in the past three years, G20 members have brought more than 3,800 investment projects to the UK and created nearly 200,000 new jobs. British Prime Minister Starmer said that hosting the G20 summit will promote economic stability in the UK and other countries around the world. (CCTV News)
3. The UK plans to achieve 10% self-sufficiency in critical minerals
British Prime Minister Keir Starmer announced a strategy aimed at localizing the production of critical minerals and reducing reliance on fragile global supply chains. The plan aims to have 10% of the UK's mineral needs domestically produced and 20% recycled and reused by 2035, according to a statement released on Saturday. The statement stated that by 2035, the UK will produce at least 50,000 tons of lithium per year, and the government will invest a new round of funds of approximately 50 million pounds (approximately US$65 million) to support local enterprises. Starmer said in the statement, “Critical minerals are the cornerstone of modern life and national security.
4. Orban: Do not accept the European xmniubi.commission’s recommendation to continue funding Ukraine
Hungarian Prime Minister Orban said on the 22nd local time A video posted on social media stated that in a letter sent to European xmniubi.commission President von der Leyen, he stated that Hungary was unable to accept the three ways of funding Ukraine proposed by her. “This is a rigorously worded, clear letter, and I sent it to von der Leyen. Ukraine has the right to continue this war, but we have no obligation to continue supporting and financing a war that is doomed to fail. "Orban also said that the huge amount of money paid by Europe to Ukraine is unsupervised, and it is impossible to continue to invest billions of dollars in Ukraine without a thorough investigation.
5. The President of Ukraine may go to the United States to discuss the new "28-point" plan
< p> Keith Kellogg, the U.S. government’s special envoy for Ukraine and Russia, said in an interview a few days ago that Ukrainian President Zelensky may visit the United States to discuss the U.S.’s new “28-point” plan to end the conflict between Russia and Ukraine. New elections in Ukraine are necessary, and the United States may force Ukraine to make territorial concessions in exchange for security guarantees. Kellogg said that the United States is very close to reaching a peace agreement between Russia and Ukraine. The 28-point new plan previously disclosed by the U.S. media includes the conclusion of a non-aggression agreement between Russia, Ukraine and Europe, and Russia’s non-aggression policy.Parts of the state will be evacuated, and the evacuation area will be regarded as a neutral non-military buffer zone. According to this plan, once an agreement is reached, Russia and Ukraine will immediately cease fire after retreating to the agreed location; Ukraine will hold elections 100 days later.Institutional View
1. UBS: The data is expected to be weak enough to push up the probability of the Federal Reserve cutting interest rates before the end of the year
Strategists at UBS Global Wealth Management said in a report that the dollar may weaken because U.S. data released next week are expected to be weak. Important data include retail sales, consumer confidence and existing home contract sales on Tuesday, followed by durable goods orders, weekly jobless claims and new home sales on Wednesday. Strategists pointed out that these data will affect market expectations for economic growth, inflation and Federal Reserve policy. "We still expect the upcoming data to be weak enough to push market expectations towards an increase in the probability of a December interest rate cut, which will put pressure on the dollar before the end of the year."
2. Agency: UK retail sales are expected to pick up later, but the budget may pose risks
Ruth Gregory, deputy chief UK economist at Capital Economics, said that although UK retail sales fell 1.1% month-on-month in October, this data is not as pessimistic as it seems on the surface, because retail sales have grown for four consecutive months. Retailers have reported that some consumers have postponed consumption in anticipation of Black Friday sales, which means sales data may pick up in November. However, Gregory reminded that consumer sentiment remains sluggish. The latest GfK survey showed that the consumer confidence index fell further to -19 in November from -17 in October, reflecting the public's lack of optimism about the current economic prospects. This caution has a real-world background: the job market continues to be weak, inflation remains high, and tax increases are expected to be announced in next week's government budget. The risk is that the tax hikes in the budget could dampen consumer spending over the holidays.
3. The U.S. dollar continues to weaken. Analysts: The Federal Reserve is still expected to remain on hold in December.
The September non-farm payrolls report showed an unexpected increase in the unemployment rate, driving the U.S. dollar to continue its weakening trend. Analysts at Danske Bank pointed out in a report that the increase in the unemployment rate was due to an increase in labor supply, which eased labor market tensions, thereby boosting market expectations for an interest rate cut by the Federal Reserve and pushing U.S. bond yields and the U.S. dollar back down slightly. However, analysts emphasized that this data is not enough to constitute a strong signal for the Federal Reserve to clearly cut interest rates, and the trend is unsustainable. The bank still expects the Fed to remain on hold in December, with the market pricing in a rate cut probability of about 32%.
The above content is all about "[XM Foreign Exchange]: The demand for safe havens offsets the rise in interest rate cut bets, and the US dollar hits a six-month high". It is carefully xmniubi.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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