The escalation of the trade war puts pressure on the US dollar, pay attention to the minutes of the FOMC meeting

On Wednesday, the U.S. dollar continued to weaken against other currencies, under pressure as concerns about further escalation of global trade conflicts. Later in the U.S. meeting, the Federal Reserve will release minutes of its March policy meeting.

After the opening bullish on Tuesday, major Wall Street stock indexes turned down and closed down on the day, as investors did not promise a steady risk rebound. In early trading on Wednesday, U.S. stock index futures fell slightly on the day, while the U.S. dollar index fell about 0.7% to 102.20.

U.S. President Donald Trump said on Tuesday night that China is placing the yuan to offset tariffs after the dollar/offshore yuan hit a record high. Trump added that he expects to eventually reach an agreement with China. Meanwhile, Reuters reported earlier on Wednesday, citing people familiar with the matter, senior officials from China's State Department, several governments and regulators planned to meet as early as Wednesday in response to Trump's 104% tariff on Chinese goods.

RBNZ announced that it would lower the policy rate, the official cash rate (OCR), by 25 basis points to 3.5%. In its policy statement, the Fed pointed out that further reduction of OCR is appropriate.

Basic market trends in the foreign exchange market:

New Zealand dollar/USD reversed its direction, and traded in the upward area for the last time around 0.5550.

Euro/USD rose slightly on Tuesday and continued to rise during the Asian session on Wednesday, supported by widespread selling pressure around the dollar. The pair last rose about 0.8% to around 1.1050 on the day.

After two consecutive days of sharp declines, the pound/The U.S. dollar rebounded on Tuesday. The pair held their positions early on Wednesday, trading above 1.2800.

The US dollar/yen fell more than 1% on Tuesday and continued its decline during Wednesday's Asian session. As of press time, the pair fell 0.6% to 145.40 on the day. BoJ Governor Kazuo Ueda said earlier in the day that they would continue to raise interest rates if the economy continues to improve, consistent with the outlook.

Bulle market fundamentals:

Gold/USD benefited from risk aversion in early Wednesday trading, up more than 2% on the day, above $3,040.

Analysis of major currency trends:

Euro: Despite the current rebound, the euro/dollar remains below 1.1145, and the intraday bias remains neutral. You can see more consolidation, but if you retrace again, the downside space should be bound by the 38.2% retracement level of 1.0775 from 1.0176 to 1.1145. On the plus side, above 1.1145 will resume the rebound from 1.0176 to 1.1213/74 key resistance zone.

Pound: With the current recovery, the intraday bias of GBP/USD becomes neutral first. Some consolidation will be seen, but the risk will remain in the downside with the small resistance level of 1.2933 intact. Breakthrough 1.2706 will resume the decline from 1.3206 to 61.8%, and the retracement level of 1.2522 from 1.2099 to 1.3206. Nevertheless, a firm breakthrough of 1.2933 will bring a stronger rebound and retest the 1.3206 high.

Yen: The intraday bias of the US dollar/yen remains neutral, and more consolidation may occur above 144.54. If it recovers again, the upward space should be limited below the 151.28 resistance level. On the downside, below 144.54 will resume the decline from 158.86 and aim at the 61.8% forecast of 158.86 to 146.52, from 151.20 to 143.57. A breakout above this level will aim at the low of 139.57.

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