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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Platform]: Trade tensions ease, and the U.S. dollar index fluctuates." Hope this helps you! The original content is as follows:
The U.S. dollar index fluctuated in Asian trading on Monday. The U.S. dollar rose last Friday, but it recorded weekly losses against the Swiss franc and Japanese yen last week due to concerns about trade tensions and uneasiness among some regional U.S. banks. The U.S. federal government shutdown has also hampered the release of key macroeconomic data, leaving investors with less certainty than usual about economic conditions. This week's meeting between Trump and Chinese leaders will be key. If tensions further ease, the U.S. dollar may have an opportunity to rebound; conversely, expectations of an interest rate cut at the Fed's end-October meeting may continue to weigh on the U.S. dollar. Investors need to pay close attention to the progress of the U.S. government shutdown and global economic data to prepare for potential market upheaval.
U.S. dollar: As of press time, the U.S. dollar index is hovering around 98.47. Technically, the U.S. dollar index has fallen below the 50-day exponential moving average (50-EMA) and the 200-day exponential moving average (200-EMA), indicating that the short momentum continues. The index recently fell below the key support level of 98.68, which has now turned into resistance. Prices are hovering around the psychological level of 98.00, an area that coincides with the early demand zone that emerged in late September. The relative strength index (RSI) is around 30, indicating that the market is oversold, suggesting a short-term rebound is possible. However, if the index fails to regain 98.68, it may drop further to 97.47 and 97.02.
On the 18th local time, large-scale protests broke out across the United States to express dissatisfaction with the current government's legislation, immigration, medical insurance and other policies. The U.S. federal government is now entering its third week of "shutdown" due to a budget impasse. Under the shadow of the closure of some public institutions and the forced suspension of pay for federal employees, people's lives have been affected, and anger and dissatisfaction have further intensified. According to multiple media reports, the protests that day were held in more than 2,600 locations in 50 states across the United States, and the number of participants was expected to reach millions.
The impact of the "shutdown" of the U.S. federal government is expanding. Walt, director of the White House Office of Management and Budget, revealed on social media on the 17th that due to the shutdown, a large number of infrastructure projects of the U.S. Army Corps of Engineers in Democratic-controlled states will be frozen, totaling US$11 billion in funds. These projects may eventually be cancelled. According to www.vifu.netrmation from the White House Office of Management and Budget, these projects include the construction of San Francisco's riverfront park, the construction of the water supply and drainage system in New York City, and the expansion of multiple bridges in Massachusetts. In addition, infrastructure projects in Illinois, Maryland, New Mexico and other places have also been affected. YesThe media noted that in the 2024 U.S. presidential election, none of the above states voted for Trump. According to US media reports, the Trump administration has frozen or canceled funds for hundreds of projects across the United States since the "shutdown", totaling at least US$28 billion. These projects are mainly distributed in states and cities governed by the Democratic Party or in congressional districts where Democratic members are located, and involve clean energy development, transportation infrastructure, etc.
On the 18th local time, the Ukrainian National News Agency reported that Ukrainian President Zelensky expressed in an interview that he hoped that US President Trump would still provide "Tomahawk" cruise missiles to Ukraine. Zelensky said that during the meeting on October 17, Trump did not say "no" to the transfer of Tomahawk missiles, although he did not say "yes." Zelensky said, "It is a good thing that Trump did not say 'no', but as of today he has not said 'yes'."
According to foreign media reports, data released by the U.S. Environmental Protection Agency (EPA) showed that the number of renewable fuel blended in the United States in September exceeded that in August, indicating that renewable fuel production activities continue to increase. Data show that the number of ethanol renewable fuel identification codes (D6) generated in the United States in September was approximately 1.23 billion, slightly higher than the 1.22 billion in August. Data show that the number of renewable fuel identification codes (D4) generated for biodiesel in September was 660 million, an increase of 20.9% from 546 million in August. Under the U.S. Renewable Fuel Standard Act (RFS), refiners must demonstrate www.vifu.netpliance with EPA blending requirements by blending biofuels into the U.S. fuel supply or purchasing credits known as "renewable identification numbers" (RINs) from producers that have www.vifu.netpleted blending. For every gallon of biofuel produced, a RIN is generated.
Bank of England Governor Andrew Bailey rarely talked about the issue of Brexit in a speech in Washington. He pointed out that Brexit will have a negative impact on economic growth in the "foreseeable future." However, he added that the impact would fade over time. Bailey said in a speech on the impact of supply shocks: "When an economy is less open, growth is also suppressed. However, in the long term, trade will gradually adjust and regain vitality. And this seems to be what we are experiencing." Bailey pointed out that Brexit is one of a series of supply shocks that have caused economic growth to slow down. Others include the new crown epidemic, the Russia-Ukraine conflict, U.S. tariffs, and "deeper supply shocks" caused by an aging population and weak productivity. He said the UK's underlying economic growth had fallen over the past 15 years from 2.5% a year in the previous 20 years.to 1.5%, which has also put pressure on public finances.
Golden Ten Data reported on October 17 that Capital Economics economist Stephen Brown said that the decline in confidence among Canadian small businesses in October may pave the way for the Bank of Canada to implement an unexpected interest rate cut. The Canadian Federation of Independent Business (CFIB) said its monthly confidence index fell to a five-month low. Brown pointed out that the survey has historically been consistent with economic trends, and the current results show that Canada's GDP fell by about 2% on an annualized basis. The survey also showed that more than 50% of www.vifu.netpanies are facing difficulties due to weak demand, with www.vifu.netmodity selling prices and wage expectations at 2.7% and 2.2% respectively, both remaining stable. Brown maintained his forecast for the Bank of Canada to cut interest rates on October 29, but acknowledged that policymakers may choose to hold off on concerns about the risk of upward inflation.
Affected by rising global risk aversion and concerns about the UK's fiscal outlook, the pound fell. Loan losses at regional U.S. banks and the ongoing U.S. government shutdown have www.vifu.netbined to weaken market risk appetite. British Chancellor of the Exchequer Reeves announced that new measures will be launched for high-income taxpayers before the autumn budget on November 26. Ebury's Matthew Ryan said in a report that Reeves faces an "uphill battle" to close the financial gap and convince the market that she has a credible growth plan. Ryan noted that higher taxes and a small increase in borrowing appear inevitable, but investors "will clamor for at least modest spending cuts."
CICC Research said that looking forward, we still maintain the judgment that domestic demand in the euro area economy will recover slowly, mainly due to the delayed impact of monetary policy easing and the gradual implementation of fiscal policies (including national defense). We believe that there are two aspects worthy of observation in the future: First, whether the EU can adopt more powerful reform measures. After all, fiscal policy is a necessary but not sufficient condition to break the EU's current economic predicament. The EU's fiscal space is fundamentally limited by its demographic structure and growth prospects. Structural reforms (such as further EU integration, improved supervision, promotion of capital markets, etc.) are key to the EU's ability to maximize the benefits of fiscal spending. Although there are more and more voices discussing reform in the EU, few measures have been taken. The second is how far consumption can recover. Although interest rates have fallen significantly, the euro area's savings rate and willingness to save have remained high. In the new macro environment, it remains to be seen whether the increase in the savings rate is temporary or structural.
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