Although the main concern of the current foreign exchange market is the slowdown in the Fed ’s interest rate hike promoting the decline in the US dollar, the biggest factor may be on the other end of the earth, China.
According to Bloomberg, the above view comes from the US -Bank strategist.They followed the trend of China's "currency re -expansion assets" relative to a US dollar index.The correlation between the two (strengthened since November), indicating that the re -open emotions around China will continue to affect the US dollar trend.
"The recovery of China’ s re -expansion transactions may be an important promotion factor for the depreciation of the US dollar, and it may be more important than the US interest rates, "the strategist Adesth Sinha and Janice XUE on Tuesday (January 17)A report wrote.
ICE US dollar index (tracking the US dollar against six currency trends) has fallen by about 10%since its Twenty -year highs in September last year.The Bloomberg US dollar index also declined roughly at the same time.
China's cancellation of epidemic prevention restrictions is faster than expected, and the demand for sensitive assets of risks has been promoted, and the decline in the US dollar has accelerated.The decline of U.S. inflation expectations has also accelerated the depreciation of the US dollar this year, as fund companies have sold the hedging assets they favor last year.
According to the return analysis of Bank of China based on the reinvention of China, some currencies have increased more than the US dollar more than expected.In particular, the euro and yen, partly because of the recent unexpected eagle positions in the European and Japan Bank.On the other hand, strategists have found that the increase in Canadian and Norwegian Krons has not reached the above level.
