ATFXThe US dollar index is about to hit nearly20New Year High

Market: This month, the US dollar index has accumulated an increase5.22%The increase is the total of the past six months, reaching its highest point today103.47, distance2017year1Monthly high point103.82Insufficient1%It is expected to break through this point and create near20A new high since the beginning of the year. At the same time, non US currencies are experiencing an accelerated depreciation trend, typical of which are:USDJPYDepreciation this month6.87%、GBPUSDContemporaneous depreciation4.74%、AUDUSDdepreciation5.06%Even the offshore renminbi, which has always had the strongest upward momentum, depreciated in April4.5%It can be seen that the rise of the US dollar indexforeign exchangeThe huge impact of the market.

Federal Reserve:4month18On the th, St. Louis Federal Reserve President Brad said in a speech that the inflation rate in the United States is "really too high", and the Federal Reserve needs to take swift action by raising interest rates multiple times50Base point, raise interest rates to3.5%Left and right, and not excluding a one-time interest rate hike75Option for base point. Brad's views represent the thoughts of most Fed officials, and hawkish rhetoric is a significant factor driving the US dollar index higher. Latest in the United StatesCPIby8.5%However, the long-term regulatory goals of the Federal Reserve are2%The gap between the two is significant, and it is not unreasonable to say that the United States is currently experiencing hyperinflation. More seriously, all the factors that cause hyperinflation have not yet disappeared, such as100It is expected that this situation will continue for a long time, such as oil with about US dollars, consumer grade chips with insufficient production capacity, and rising agricultural product prices due to the Russia-Ukraine conflict. The latest unemployment rate in the United States3.6%Below the level of full employment5%The performance is quite good, even comparable to Japan's lifelong employment system. fromCPIFrom the perspective of unemployment rate, the possibility of rapid interest rate hikes leading to economic recession is relatively low, and the US economy has sufficient downward space to cushion the negative impact of interest rate hikes.

Why is April Actually, the Federal Reserve did it as early as last year11The month has already shifted from a dove faction to a hawk faction, and the number of interest rate hikes more than five times within the year has become a consensus in the market since the beginning of this year. So, why did the surge in the US dollar index occur in April instead of other months? We observed that the Russia-Ukraine conflict2Starting from the month,3The month reached its climax (marked by the fifth round of negotiations), and April came to a standstill. When international capital feels panicked, it will rush into the United States to avoid risks. If the Russia-Ukraine conflict had been "settled quickly", European capital would not flow into the United States continuously. Once a war reaches a stalemate, it is a chronic death for European capital, which in turn stimulates the motivation for capital flight. The US dollar index achieved an astonishing six consecutive positive trend in this situation. European countries have followed the United States in implementing various sanctions against Russia, leading to the possibility of Russia disrupting its natural gas supply to Europe. Once 'gas failure' becomes a reality, the European economy will inevitably experience a severe recession.

If the Russia-Ukraine conflict suddenly ends: Russia wants to de dollarize, but because of its military action against Ukraine, the dollar index has indirectly increased significantly. If Russia's military action against Ukraine suddenly ends, the driving force behind the rise of the US dollar index will no longer exist. It can be said that as long as a certain agreement is reached between Russia and Ukraine, allowing European funds to see clear future prospects, the trend of fund flight will soon end.
Technical aspects of the US dollar index:


Summary
ATFXAnalyst team: The US dollar index is about to create20At a new high, we maintain a bullish view of it. Moreover, the rise of the US Index in this round is highly likely to have an impact110Integer level103.84The probability is only the beginning, not the end.

*Risk Tips and Disclaimers*
There are risks in the market and investment should be cautious. The above contents only represent the views of analysts and do not constitute any operational recommendations.