ATFX: The non farm data is better than expected, and the dollar index is approaching104

The non farm data released last Friday exceeded expectations, and the number of new non farm employees reached26.310000 people, compared with the former28.410000 people were basically equal, far higher than the expected20Ten thousand people increased. The US labor market did not show signs of economic recession after the high terminal interest rate, but showed a pattern of both supply and demand.11Negative news such as layoffs and job suspension of Internet companies, which were frequently seen in the newspapers in January, gave false guidance to poor market expectations, but did not have a significant impact on the non-agricultural employment report.

If, before the inflection point of high inflation in the United States appears, the bright non farm data will help the dollar index, because the Federal Reserve's aggressive interest rate hike will no longer worry about the future. However, under the background that the high inflation inflection point theory has been accepted by the market, the unexpected non farm data will only lead to a sharp decline in the dollar index, because the Federal Reserve does not need to raise interest rates aggressively to curb inflation, and the current high interest rates have not led to a hard landing of the economy.

Last Friday, the dollar index fell on a single day0.18%, lowest touch104.37, expected to fall below this week104Gateway.EURUSDHas broken1.05, this price is at11It was unimaginable before January, but now the expected target of the market has been raised to1.1Horizontal.goldQuote per ounce1800The US dollar almost fell below the US dollar during the aggressive interest rate increase of the Federal Reserve1600, now the market is expected to rise to1900USD. Financial marketCPIBoth the data and the speech of the Federal Reserve officials have shown that the window period for a major trend turn is coming.

The Bank of Canada will23:00The announcement of the interest rate resolution is likely to become the first central bank to reduce the single interest rate increase. Since this year, the Bank of Canada has raised interest rates6Times, and the single interest rate increase range is:25Base point50Base point50Base point100Base point75Base point50Base point. CanadianCPIThe growth rate is7The turning point comes in January8.1%Descend to7.6%，10The latest value of the month is only6.9%The effect of tightening monetary policy has been very significant. Experience shows that Canada and Australia tend to revise their own monetary policies after the Federal Reserve's monetary path becomes clear and predictable. however,USDCADperhapsAUDUSDThe trend of is still dominated by the US dollar index, and the "advance action" of Canada and Australia often has no significant impact on the exchange rate.

In the medium term, what price can the dollar index fall to? this year3month16The Federal Reserve of Japan raised interest rates for the first time, when the price of the dollar index was98.4, approaching100Gateway. Although the Federal Reserve will change its aggressive interest rate increase policy into a moderate one due to the inflection point of inflation data, the general direction of interest rate increase remains unchanged. Logically, the dollar index should not fall below the starting price of the first interest rate increase, that is98.4。 Of course, in addition to monetary policy, there are many unstable factors to be analyzed, such as whether the inflation, employment and macro-economy of the United States will change significantly next year. "One step at a time" is a more pragmatic analysis method in the transition period.

ATFXComprehensive view of the analyst team: On the day when the non farm data was released, the three major stock indexes in the United States rose and fell at different levels with small fluctuations, and the impact of the non farm data was relatively weak. This is also before the problem of high inflation in the United States（2021(before): The influence of monetary policy adjustment on US stocks is expected to weaken.

*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.
2022-12-05