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Hello everyone, today XM Forex will bring you "[XM Group]: The US dollar fell into "weird calm" against the yen! The bulls and bears were in a stalemate before Powell's speech, and Trump's "breaking bomb" may detonate the market?" Hope it will be helpful to you! The original content is as follows:
XM Foreign Exchange APP News-Since August, the US dollar has been unique against the yen, and has little to do with traditional drivers such as interest rate spreads, volatility and risk preferences. As the economic calendar is calm for most of this week, before Fed Chairman Powell’s speech on the annual meeting of Jackson Hall central bank on Friday (August 22), the exchange rate is likely to continue the range-shaking pattern - unless, of course, Trump once again "surprise". The US dollar against the Japanese yen has long been the main drivers of the US dollar against the Japanese yen, but this month it has been abnormal. The correlation coefficient confirms this change - currently, only the interest rate spread between China and the United States still has some correlation, and even this correlation seems weak ehadb.cnpared to the historical level. Obviously, the foreign exchange market has entered the traditional off-season in August. No traders are willing to build positions in large quantities, whether in interest rates or foreign exchange markets. The calm economic calendar brings more range trading risks. No major economic data from the United States and China are released, and this situation will continue from the beginning of this week. Although the initial S&P global PMI value, Japanese trade data and the national CPI released on Friday will attract market attention, it will also need to deal with the 20-year U.S. bond auction (this term variety is already weak, let alone the interweaving of current policies and economic uncertainty). But the question is: Can these events really shake the dollar against the Japanese yen? Very suspicious. Geopolitics remains the fuse of potential volatility—including Trump’s meeting with Zelensky in Washington on Monday, but unless the matter triggers major differences between the United States and Europe, the market is more likely to regard it as a “muzzle” rather than a valid signal. The real highlight is Powell's heavy speech at the Jackson Hole annual meeting on Friday. This has been a concern since the global financial crisisThose who have written the article know that the substantial impact of such events on the market is often uneven – especially in non-crisis times. This means that the meeting is likely to end in a dull manner and it is difficult to cause trouble. But in this era when the independence of the Federal Reserve is openly questioned, nothing is possible. Market participants showed near "blind confidence" and firmly expected the Fed to cut interest rates several times this year - even as more and more evidence shows inflationary pressures (especially service prices) are rising again. In addition to the increasingly obvious tendency of politicization by the Federal Open Market ehadb.cnmittee (FOMC), the root cause of market dovish expectations is: July released earlier this month
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