The US dollar index fluctuates below 103, and the market pays attention to the US CPI

On Thursday, the US dollar index hovered around 102.65, traders must wear seat belts - when the Federal Reserve's policy toolbox bottoms out and the trade war bullets fly, every breath of gold may trigger a market tsunami! Before and after the CPI data is released tonight, please make sure that the account margin is sufficient. This battle will determine who will become the winner in troubled times! In addition, it is necessary to pay attention to the changes in the number of initial unemployment claims in the United States. Several Federal Reserve officials will make speeches this trading day, and investors also need to pay attention.

Analysis of major currency trends

Dollar: As of press time, the US dollar index hovers around 102.65, and the US dollar index (DXY) hovers in the 103 range in Wednesday's trading, slightly stable after the recent selling pressure, which lowered it below 102.00. The slight rebound avatradescn.comes after the minutes of the March meeting released by the Federal Reserve (Fed), policymakers pointed to the future "difficulty trade-offs", citing the risks of high inflation and slowing economic growth. Technically, the moving average convergence/divergence (MACD) shows a sell signal, while the strength index (RSI) hovers around 40, reflecting the neutral tone. Supporting the bearish view is that key moving averages such as the 20th (103.63), 100th (106.53) and 200th (104.81) simple moving averages continue to trend downward. Both the 10-day exponential moving average and the 10-day simple moving average are 103.2Around 0–103.38, downward pressure has also been strengthened. Resistance is at 102.62, 103.21 and 103.38, while initial support is near 101.83. If this bottom is broken, a deeper retreat may be launched toward the psychological threshold of 100.00.

Euro: As of press time, the euro/dollar hovers around 1.0985. Although the United States has changed its tariff policy again, leading to a wide market recovery in investors' risk appetite, the euro/dollar still hovers between 1.1000 and 1.0900. U.S. President Donald Trump announced via social media that his administration will postpone "peer" tariffs for 90 days, although a 10% universal tax remains at present. Investors around the world quickly found buying opportunities in the news, however, the euro quickly disappeared after a brief rebound to around 1.1100, leaving the euro/dollar still in a familiar congestion area. Technically, the EUR/USD ended a two-day downtrend this week, marking a short-term technical support level of 1.0900. However, buying pressure remains weak, and a slight push from shorts could easily push the EUR/USD back to the 200-day index moving average (EMA), which is near 1.0700. Despite the sharp rebound in March, there is still a strong resistance zone between 1.1100 and 1.1000.

GBP: As of press time, GBP/USD hovered around 1.2838. GBP/USD tested rising on Wednesday, climbing back above the 1.2800 mark, after a full recovery of widespread market sentiment. The Trump administration once again deviates from its "no exceptions, no delays" tariff policy and delays tariffs again, this time delaying for 90 days. The rest of the week's trading is all about U.S. data: U.S. Consumer Price Index (CPI) inflation data is scheduled to be released on Thursday, and U.S. Producer Price Index (PPI) inflation and the University of Michigan (UoM) Consumer Confidence Index survey results are scheduled to be released on Friday. This will be the last wave of key U.S. inflation and confidence data in the "pre-tariff" phase of 2025, providing key measurements for the remaining calendar years. Technically, the GBP/USD was backed by buying again on Wednesday, continuing a slight rebound from the 200-day index moving average (EMA) slightly above 1.2700, striving for a second straight day of gains. Bullish momentum is still on the verge of weakness, but buying pressure is just enough to keep the pound high. Buyers still need to extend from the 200-day EMA to confirm a bullish recovery, but short-term momentum seems to be disappearing too quickly to allow new selling positions.

Summary of news from the foreign exchange market

1. "Doctor Doomsday" Roubini: The Federal Reserve will not save the situation for Trump's trade war

Ruriel Roubini issued a new warning to Wall Street: traders should reduce bets that the Federal Reserve will increase interest rate cuts to alleviate the impact of President Trump's trade war. Roubini, a famous economist who is known as the "Doctor Doomsday" for accurately predicting the global financial crisis, believes this time that the United States will escape the recession and that the Federal Reserve will keep interest rates unchanged for the rest of the year after the dispute over tariff-related policies eases. "This is certainly a head-on fight between Trump's and Powell's bottom," Roubini said. "But what I want to say is that the exercise price of Powell's bottom will be lower than Trump's bottom, which means Powell will wait until Trump blinks first." Federal Reserve Chairman Powell said last week that the economic impact of the new tariffs may be far beyond expectations, and the central bank must ensure that this does not trigger an increasingly serious inflation problem. Traders have digested expectations of the Fed's interest rate cut three to five times, at 25 basis points each this week, and some people on Wall Street even believe that the central bank may urgently cut interest rates before its next meeting.

2. Countdown to the "liquidity crisis" in the US bond market

The 10-year US bond yield soared to a February high of 4.515%, behind which is the terrifying signal that the direct bidding rate of sovereign buyers such as Japan reached a 15-year freezing point. When the biggest creditors may be selling U.S. bonds, gold's demand for "de-dollarization" will be boosted by the Rockets!

3. CPI may become the ultimate fuse tonight

All eyes focus on Thursday's US CPI data - if inflation exceeds expectations, the market's fear of the Fed's "longer and higher" interest rate will give gold to $3,200; if the data is weak, the expectation of an early interest rate cut will trigger a more crazy safe-haven buying.

4. Fed meeting minutes: The US economy faces the dual dilemma of high inflation and slowing growth

The minutes of the Fed's March meeting released on Wednesday (April 10) revealed a cruel reality - decision makers almost unanimously believe that the US economy is deeply trapped in the double quagmire of high inflation and slowing growth. Faced with this "diplomatic dilemma", some officials warned that they may have to make "painful choices" in the future. The meeting coincided with the Trump administration's announcement of preliminary tariff plans, and policy uncertainty increased, forcing the Federal Reserve to adopt a "cautious wait-and-see" strategy: it may maintain high interest rates for a long time due to stubborn inflation, or an emergency rate cut due to economic stalls.

5. Former Deputy Governor of the Bank of Canada: The suspension of tariffs brings a chance to breathe, but the haze of the trade war has not yet dissipated. Paul Beaudry, former deputy governor of the Bank of Canada, said that the 90-day suspension of US reciprocity tariffs represents a ease of extreme trade policies. Despite the White House’s policy changes, uncertainty will remain high as the global economy remains in a state of high tariffs. He believes that the most important thing is to observe how families and businesses deal with this situation.

Institutional Perspective

1. Citi: The suspension of tariffs cannot solve the problem. The United States still faces economic slowdown and inflation. Citi economist Andrew Hollenhorst believes that the suspension of the so-called reciprocal tariffs on most trading partners does not mean that the U.S. economy has avoided slowdowns and rising inflation. The 10% benchmark tariff that remains in effect during the 90-day suspension of reciprocity tariffs, as well as industry-specific tariffs, still raises the U.S. effective tariff rate by about 21 percentage points from the level at the beginning of this year. Trade uncertainty will continue. Citi still expects the Federal Reserve to cut interest rates in May or June.

2. Investment Bank: If bonds continue to fall, the Federal Reserve will urgently QE

Deutsche Bank said that if the turmoil that once pushed the long-term U.S. borrowing costs to more than 5% continues, the Federal Reserve will need to take action to stabilize the U.S. Treasury market. On Wednesday, doubts about the security of U.S. assets continued to escalate Wednesday, aggravated the sell-off of U.S. Treasury bonds, with the 30-year Treasury yield rising to 5.02%, the highest level since November 2023. If this continues, the Fed will need to intervene, which George Salaveros, the bank's global head of foreign exchange strategy, calls it a "circuit breaking mechanism" - that is, emergency quantitative easing. He wrote: "If the turmoil in the US Treasury market continues recently, we think the Fed has no choice but to buy US Treasury bonds urgently to stabilize the bond market."

3. Market analysis: The euro has become a safe haven outside the US dollar, but the rise may be short-lived.

Monex European analysts said in a report that after the U.S. entered into force on Wednesday, the euro became another safe haven outside the US dollar, and therefore the euro rose. However, they said the appreciation of the euro against the dollar could be short-lived. “The market has not fully considered the impact of tariffs on European economic growth and the possible impact of rising U.S. inflation on the Fed.” As the full impact of tariffs becomes apparent in the avatradescn.coming months, the expected growth and spreads of the euro against the dollar are likely to widen. Once traders realize it is a global shock, the dollar may return to its safe-haven position.

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