Source: Bloomberg
Author: Ruth Carson, Masaki Kondo, Carter Johnson
Major central banks around the world may enter the most synchronized interest rate cut cycle since 2008, which will bring support to the first rebound of the US dollar.
Almost all G-10 currencies will rise against the US dollar at the beginning of the year, because they expect the Fed to conduct a series of big interest rate cuts.However, the reality is that the US dollar index rose more than 2%this quarter, and the US dollar won most of the major opponent currencies.
The performance of the dollar not only reflects the re -adjustment of the Federal Reserve interest rate cut, but also reflects that the market recognizes that the United States will not be the only one.According to Bloomberg's analysis of economists' predictions and international liquidation banking data, with the weakening of global economic growth, 10 of the 11 major central banks, including the Federal Reserve, are expected to cut interest rates in the second half of this year. This will be marked.With 16 years of synchronized policy easing cycles.
The Bank of Japan will be one of the few exceptions. The bank has just said goodbye to the world's only negative interest rate policy and ended the most radical currency stimulus plan in modern history.However, there are long reminders in the early stage of this operation, and it should be noted that the financial environment will remain loose.
Analysis shows that when the 80%or higher proportion of central banks relax the policy simultaneously, the US dollar will increase an average of more than 3%per quarter.The U.S. dollar will maintain this trend this time, because the Fed's policy interest rate may still be the highest among major developed economies, second only to New Zealand by the end of this year.
"" Making a lot of bigger dollars in a large number of dollars may be wrong, "said Vishnu Varaathan, head of the economy and strategic director of Ruisui Bank."The Fed's steering will inevitably make the US dollar a great victory -this statement is very one -sided. This beast is likely to repeat impermanence, not just to say everything optimistically."
As the world's largest economy continues to maintain the toughness of economic recession, and forcing the market to reduce the expectations of radical looseness, then the prospect of the US dollar rebound is likely to become more realistic.The favorable factor of the US dollar also includes a premium premium and the still strong US stock market. At present, the stock market is still continuously attracting capital inflows.
