Did the dollar calm down?



The not-so-brilliant performance of the dollar in 2021 has prompted some central banks around the world to react so as not to allow them to strengthen too much against the dollar. In China, some news sources have reported that the country’s central bank has ordered banks to increase the dollar-to-dollar ratio of their deposits with the aim of deliberately weakening the yuan against the dollar. The Chinese are concerned that the strengthening of the yuan against the dollar could reduce the competitiveness of Chinese products against their American counterparts in global markets.

Inflation is worrying in many European countries: According to the German Statistics Center, inflation rose above 2% in April. The average positive consumer price was 2.5 percent, which was 0.5 percent higher than the figure recorded last month and 0.2 percent higher than the expectations of economic actors. This is also the highest positive inflation recorded in the country in the last 13 years and will make it difficult for the central bank to adopt an expansionary approach.

The selling pressure on the dollar has risen sharply in recent weeks as US inflation hit a 29-year high, with the dollar performing negatively against major currencies in April and May. However, other competitors of the dollar have not been able to significantly increase their differences with the dollar in recent months due to the unfavorable economic situation of other countries, and this has led some analysts to expect the dollar to rise in the second half of this year. To be.

Finally, after about a year, the US gross domestic product exceeded $ 21 trillion. According to the US Census Bureau, in May, the US gross domestic product in the 12 months to May reached 22 trillion 157 billion and 490 million dollars, thus maintaining the US position as the world’s largest economy. has done. The debt of the US states was 2 trillion and 120 billion and 480 million dollars and the share of each American citizen in the debts of the US government was equal to 3712 dollars.

Money and financial market policymakers are moving to return calm to trading as soon as possible. In China, lawmakers have announced a reduction in their foreign exchange intervention and have said that current foreign exchange policies will not change much. In the UK, the central bank said interest rates were likely to rise before the end of the first half of next year, which, if realized, would be the first rate hike since the coron began.

Joe Biden’s administration is set to submit the largest budget bill in its history since World War II to Congress for approval. The $ 6 trillion budget faces a $ 1.3 trillion deficit that is unparalleled in contemporary American history. A large part of the sharp increase in government spending is related to funding for infrastructure development as well as the US health care network, which aims to accelerate economic growth in the coming years and increase the welfare of the middle class.

So far, more than 174 million 952 thousand 919 cases of corona have been reported, among which 3 million 771 thousand 237 people have lost their lives. Among the various countries, the highest casualties were in the United States with 613,118, Brazil with 477,307, India with 359,501, Mexico with 229,100 and Peru with 187,157. .

“The important issue facing the foreign exchange market is how long the central banks, especially the Federal Reserve, want to continue with the current practice,” said Philip V, senior foreign exchange strategist at DBS Bank. As we can see from some speculations, we will soon see a change in policy. US Treasury Secretary Janet Yellen has also implicitly supported raising interest rates because she believes it will help boost economic growth.

Dollar Index

The dollar index, which measures the exchange rate against a basket of global currencies, closed at 0.0130 at today ‘s level, up 0.06% from the previous day.

The exchange rate of each Swiss franc was announced as $ 1.115. (The above rates are calculated based on the closing hours of New York foreign exchange markets.)

European currencies

In the most recent round of trading, the pound traded down 0.23 percent from the previous day at $ 1.411. The euro was down 0.02 percent at $ 1.217 after staying at $ 1.21.

Asian currencies

In Asian currency markets, the dollar rose 0.12 percent to 109.626 yen. Against the Australian counterpart, each US dollar was traded for $ 1.292. The exchange rate of the dollar was also equal to 6.387 Chinese yuan.

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