Foreign exchange trading reminder on August 8: The Federal Reserve may continue to raise interest rates aggressively to boost the dollar, and the pound still has a hard time to suffer under the pressure of multiple negative pressures


2022-08-08: [Chinese Article Link The United States dollar index, which is now in the vicinity of 106.66, is projected to increase by 528,000 in July, which will support the Fed's expectation of interest hikes. Thomas Flury, the Swede’s global wealth management strategist, argued that inflation, energy supply and political uncertainty could crush the pound sterling against the United States dollar in the coming months. Monday's highlights and the big picture. Summary of institutional perspectives Beijing’s morning trip, Monday, August 8, to Asia, is a small increase, now close to 106.66. Last Friday’s data show that the number of non-farm jobs in the United States increased by 528,000 in July, the largest increase since February, well above economists’ expectations. After the report was published, the upturn was significantly increased, with a final gain of 0.79 per cent to 106.58. Axel Merk, Managing Director and Chief Investment Officer of Merrk Investment, said: “This is a much stronger report than expected, meaning that the Fed is unable to reverse its course of action at this time. The Fed must continue to raise interest rates, and those who say they're slow in the report stand aside. The United States dollar is strong against almost all currencies. The dollar is doing well when the global economy is generally thought to be slowing. The Fed raised its policy interest rate by 75 basis points last week. Since March, the Fed has accumulated 225 basis points, but investors have recently been assessing whether the Fed’s future rate increase will be less aggressive. Driven by the outlook for interest hikes, it has risen by more than 11% so far this year. The Bank J. Safra Sarasin’s Karsten Junius states: “We insist that the overall global macro context remains favourable to the dollar. “America’s July non-farm report is stronger than expected, suggesting that the Fed may need to continue with a radical increase in interest rates in the short term. The dollar rose sharply last Friday, against the Japanese yen, the largest single-day percentage increase since mid-June, with a final gain of 1.58%, or 134.98%. Last Friday, it fell by 0.71%, or 1.2072. The British Central Bank raised its interest rate by 50 basis points last Thursday, the largest in 27 years, despite its warning that as central banks move quickly to contain inflation, a prolonged recession is approaching, and the economy will contract from the fourth quarter. “We believe that the pound sterling has been influenced by the attitudes of the Federal Reserve's hard-line eagles. This Friday will be the second quarter of the UK GDP data, which should confirm the market’s negative mood. Foreign exchange analysts said that the decline in the Rhine River water level, which affected Germany's transport and economy, was a major reason for vacating the euro. Frances Cheung, the OCBC Bank’s strategist, claims that in Germany, the Rhine River’s water level has fallen to its lowest level since 2018, making it almost impossible to transport coal, sand, chemicals, and other commodities. This could affect trade, economic growth and exacerbate energy problems in Germany and the euro area. According to Domong Securities, Canada’s employment data for July were weaker than expected, raising the threshold of the Central Bank of Canada’s 50 basis points for interest hikes in September, with the Canadian dollar likely to fall further; 21.30 would be the next key position for the currency to be tested or re-tested 1.32, but it might take a little more time for the 1IG analyst, Bichom Chris Beauchamp, to say that, after the British Central Bank’s warning of a possible recession in the British economy, strong employment data in the United States highlighted the gap between the United States and the British economy, which seemed to be vulnerable to further decline. As the gap between the United States and the United Kingdom widens, it seems particularly likely that the pound sterling will be further softened; a further decline of Pound2 would offset most of the British Central Bank's efforts to control inflation and perpetuate the previously bleak outlook. The data from FactSet show a decline of 0.9 per cent to 1.2047, after falling to the lowest level in more than a week's time: 1.2004, Joseph Capurso, Director of International Economics at the Commonwealth Bank of Australia, stated: “We still expect that in the next few weeks we will be below parity and will not be short-lived: “1 Montreal Bank chief economist Douglas Porter says that the Canadian employment market is clearly losing momentum, and weak employment data for July highlight the decline in part-time and full-time jobs, as well as the weakness of the private and public sectors, while the fall in employment in June was entirely due to a decline in the number of self-employed persons;2 the downward trend in labour participation rates deserves close attention, the labour market or further tightening. For the Central Bank of Canada, it can be concluded that, despite a marked decline in economic growth, the situation remains “stressed” and wage levels are rising, in line with the expectation of a further increase in interest rates at the September meeting, but that the rate increase may fall short of the 50 basis points of July1 and the definition of the “technical recession” prevailing in financial markets has been met with the contraction of the United States economy in the first two quarters of 2022. However, the labour market has so far been very strong, which will ultimately determine whether the United States economy will lead to a real recession as a result of rising unemployment and falling consumption spending;2 at a press conference after the July meeting, Federal Reserve Chairman Powell made explicit reference to the two employment reports published prior to the September meeting, which will help to determine whether the Fed must have a strong brake on interest hikes. Currently, non-farm employment reports have been published, indicating that the labour market is still hot, and that the Fed’s desired cooling to reduce inflationary pressure has not been achieved. Thus, the call for another 75 basis points of interest hike for the Fed in September is likely to be increasingly high, with an asset management company, Safra Sarasin’s report showing an unexpectedly strong growth in the eurozone in the first half of 2022, a figure of 1.2%, about 2% higher than the US economy. In the third quarter, some southern European countries are expected to benefit from the recovery in tourism, but the overall trend in economic growth has declined markedly; the Chief Economist of 2 Safra Sarasin has indicated that the eurozone is increasingly likely to experience a recession this winter. Germany, the eurozone’s largest economy, will be hit particularly hard, and may already be in recession, with Mateuz Urban, an economist at the Tianjin Institute of Economic Studies, saying that industrial production in the eurozone’s major economies experienced unexpected growth in June. The German industrial ring grew by 0.4 per cent, the French industry by 1.4 per cent and the Spanish industry by 1.1 per cent, with the only exception of Italy, where the collapse of automobile production dragged manufacturing production down by 2.1 per cent in June;2 on the basis of national data released last Friday, the Instituto Económico Económico Niño Tianjin estimated that industrial output in the euro area grew by 0.2 per cent in June and by 0.3 per cent in the second quarter. But given the weakening of demand, the deterioration of market sentiment and the increasing likelihood of the introduction of natural gas rations in the winter season, eurozone industry is expected to fall into recession early next year.


Note: This is a machine translated version of the Chinese news media article. A mature and nuanced reading is suggested.




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Foreign exchange trading reminder on August 8: The Federal Reserve may continue to raise interest rates aggressively to boost the dollar, and the pound still has a hard time to suffer under the pressure of multiple negative pressures


2022-08-08: [Article Link The United States dollar index, which is now in the vicinity of 106.66, is projected to increase by 528,000 in July, which will support the Fed's expectation of interest hikes. Thomas Flury, the Swede’s global wealth management strategist, argued that inflation, energy supply and political uncertainty could crush the pound sterling against the United States dollar in the coming months. Monday's highlights and the big picture. Summary of institutional perspectives Beijing’s morning trip, Monday, August 8, to Asia, is a small increase, now close to 106.66. Last Friday’s data show that the number of non-farm jobs in the United States increased by 528,000 in July, the largest increase since February, well above economists’ expectations. After the report was published, the upturn was significantly increased, with a final gain of 0.79 per cent to 106.58. Axel Merk, Managing Director and Chief Investment Officer of Merrk Investment, said: “This is a much stronger report than expected, meaning that the Fed is unable to reverse its course of action at this time. The Fed must continue to raise interest rates, and those who say they're slow in the report stand aside. The United States dollar is strong against almost all currencies. The dollar is doing well when the global economy is generally thought to be slowing. The Fed raised its policy interest rate by 75 basis points last week. Since March, the Fed has accumulated 225 basis points, but investors have recently been assessing whether the Fed’s future rate increase will be less aggressive. Driven by the outlook for interest hikes, it has risen by more than 11% so far this year. The Bank J. Safra Sarasin’s Karsten Junius states: “We insist that the overall global macro context remains favourable to the dollar. “America’s July non-farm report is stronger than expected, suggesting that the Fed may need to continue with a radical increase in interest rates in the short term. The dollar rose sharply last Friday, against the Japanese yen, the largest single-day percentage increase since mid-June, with a final gain of 1.58%, or 134.98%. Last Friday, it fell by 0.71%, or 1.2072. The British Central Bank raised its interest rate by 50 basis points last Thursday, the largest in 27 years, despite its warning that as central banks move quickly to contain inflation, a prolonged recession is approaching, and the economy will contract from the fourth quarter. “We believe that the pound sterling has been influenced by the attitudes of the Federal Reserve's hard-line eagles. This Friday will be the second quarter of the UK GDP data, which should confirm the market’s negative mood. Foreign exchange analysts said that the decline in the Rhine River water level, which affected Germany's transport and economy, was a major reason for vacating the euro. Frances Cheung, the OCBC Bank’s strategist, claims that in Germany, the Rhine River’s water level has fallen to its lowest level since 2018, making it almost impossible to transport coal, sand, chemicals, and other commodities. This could affect trade, economic growth and exacerbate energy problems in Germany and the euro area. According to Domong Securities, Canada’s employment data for July were weaker than expected, raising the threshold of the Central Bank of Canada’s 50 basis points for interest hikes in September, with the Canadian dollar likely to fall further; 21.30 would be the next key position for the currency to be tested or re-tested 1.32, but it might take a little more time for the 1IG analyst, Bichom Chris Beauchamp, to say that, after the British Central Bank’s warning of a possible recession in the British economy, strong employment data in the United States highlighted the gap between the United States and the British economy, which seemed to be vulnerable to further decline. As the gap between the United States and the United Kingdom widens, it seems particularly likely that the pound sterling will be further softened; a further decline of Pound2 would offset most of the British Central Bank's efforts to control inflation and perpetuate the previously bleak outlook. The data from FactSet show a decline of 0.9 per cent to 1.2047, after falling to the lowest level in more than a week's time: 1.2004, Joseph Capurso, Director of International Economics at the Commonwealth Bank of Australia, stated: “We still expect that in the next few weeks we will be below parity and will not be short-lived: “1 Montreal Bank chief economist Douglas Porter says that the Canadian employment market is clearly losing momentum, and weak employment data for July highlight the decline in part-time and full-time jobs, as well as the weakness of the private and public sectors, while the fall in employment in June was entirely due to a decline in the number of self-employed persons;2 the downward trend in labour participation rates deserves close attention, the labour market or further tightening. For the Central Bank of Canada, it can be concluded that, despite a marked decline in economic growth, the situation remains “stressed” and wage levels are rising, in line with the expectation of a further increase in interest rates at the September meeting, but that the rate increase may fall short of the 50 basis points of July1 and the definition of the “technical recession” prevailing in financial markets has been met with the contraction of the United States economy in the first two quarters of 2022. However, the labour market has so far been very strong, which will ultimately determine whether the United States economy will lead to a real recession as a result of rising unemployment and falling consumption spending;2 at a press conference after the July meeting, Federal Reserve Chairman Powell made explicit reference to the two employment reports published prior to the September meeting, which will help to determine whether the Fed must have a strong brake on interest hikes. Currently, non-farm employment reports have been published, indicating that the labour market is still hot, and that the Fed’s desired cooling to reduce inflationary pressure has not been achieved. Thus, the call for another 75 basis points of interest hike for the Fed in September is likely to be increasingly high, with an asset management company, Safra Sarasin’s report showing an unexpectedly strong growth in the eurozone in the first half of 2022, a figure of 1.2%, about 2% higher than the US economy. In the third quarter, some southern European countries are expected to benefit from the recovery in tourism, but the overall trend in economic growth has declined markedly; the Chief Economist of 2 Safra Sarasin has indicated that the eurozone is increasingly likely to experience a recession this winter. Germany, the eurozone’s largest economy, will be hit particularly hard, and may already be in recession, with Mateuz Urban, an economist at the Tianjin Institute of Economic Studies, saying that industrial production in the eurozone’s major economies experienced unexpected growth in June. The German industrial ring grew by 0.4 per cent, the French industry by 1.4 per cent and the Spanish industry by 1.1 per cent, with the only exception of Italy, where the collapse of automobile production dragged manufacturing production down by 2.1 per cent in June;2 on the basis of national data released last Friday, the Instituto Económico Económico Niño Tianjin estimated that industrial output in the euro area grew by 0.2 per cent in June and by 0.3 per cent in the second quarter. But given the weakening of demand, the deterioration of market sentiment and the increasing likelihood of the introduction of natural gas rations in the winter season, eurozone industry is expected to fall into recession early next year.

Note: This is a translated version of the Chinese news media article. A mature and nuanced reading is suggested.

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