Stimulated the buying demand of US dollar bulls

Huitong Network2month28Daily News - Tuesday（2month28After experiencing an overnight rise, the US dollar index has experienced a pullback, after US President Trump sought a "historic" increase in military spending, which stimulated buying demand from US dollar bulls. However, investors still adopted a wait-and-see attitude before Trump's congressional speech, causing the earlier rise of the US dollar to pause.

Asian market review: US dollar bulls take a brief break, market eagerly awaits Trump's speech

Senior at Barclaysforeign exchangeStrategistShin KadotaThe comments about military and infrastructure spending have raised expectations for Trump's congressional speech, boosting the US dollar and bond yields.

since2016year11Shortly after Trump won the US presidential election, the US dollar index immediately rose to14At the peak of the year, his election raised expectations for a large-scale fiscal stimulus and inflationary policies from the outside world. But recently, the US dollar has fallen because the Trump administration has not provided specific implementation details, especially the tax reform plan, and the market focus has naturally shifted to his first important speech in Congress.

If Trump mentions sensitive issues about US trading partners, there may still be fluctuations in the currency market, as quoted by Huitong Network from BarclaysKadotaIt remains to be seen how much Trump's speech can boost the US dollar, as the details of tax reform that the market is most concerned about may have to wait until3It will only be released in the month.

Market analyst at Mizuho BankDaisuke KarakamaClearly, if Trump mentions specific countries, their currencies will be affected. The countries that may attract Trump's attention include China, Germany, Japan, and Mexico, all of which have large trade surpluses with the United States. Recently, he has frequently mentioned China and Japan, so if he mentions these countries, the impact on the US dollar against the Japanese yen may be the greatest.

The euro remained stable against the US dollar1.0586Frontline, breaking away from the weekly high set the previous day1.0631. Concerns about the French election have slightly eased, helping to support the euro. Last week, the euro fell to a one and a half month low1.0494。
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