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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Aihua Foreign Exchange Decision Analysis]: The US dollar fell to a new low in a month, and Trump once again issued a tariff threat." Hope it will be helpful to you! The original content is as follows:
On May 26, during the Asian market on Monday, spot gold fluctuated slightly, and the current decline was around $334,850/ounce, a drop of about 0.3%; the US dollar index hovered at the low level in the past month, and the current trading was around 99.07. It is recommended to pay attention to the support of the daily-level Bollinger line near 98.66. U.S. crude oil rose slightly, with trading around $61.93 per barrel, an increase of about 0.8%. Geographical situations such as the continued conflict in Russia and Ukraine support oil prices. The market is concerned about the 39th OPEC and non-OPEC oil-producing countries ministerial meeting to be held on Wednesday.
U.S. President Trump proposed to impose a 50% tariff on European goods last Friday, reopening a new front for global trade tensions and triggering a new wave of market uncertainty. Investors are seeking safe haven in gold, with gold rising more than 2% last Friday, its best performance in six weeks. Investors sold the dollar, with the U.S. dollar index falling 0.8% last Friday, hitting a nearly month low of 99.09. The dollar fell 1.9% last week, the biggest weekly decline since early April.
Asian market
JP Morgan chief economist Ben Jarman said Australia's April CPI data to be released on Wednesday could rise 2% year-on-year, the weakest inflation result since October last year. Government electricity subsidies will once again help reduce households’ out-of-pocket electricity bills. Among other categories, Jarman expects prices in food, clothing and health categories to rise slightly, while prices in transportation, www.avaforexcn.communications and furniture categories are all expected to fall slightly. He added that the inflation outlook was consistent with two further rate cuts in August and November.
Warren Ho, Chief Economic Advisor of Judo BankGan said the RBA cut rates last week and tended to dovish guidance was a signal that it intends to return monetary policy to neutral levels in the short term, and the next step is expected to cut rates by 25 basis points at its next meeting in July. Nevertheless, the RBA may speed up the process by cutting 35 basis points, bringing the official cash rate (OCR) to the expected neutral rate of 3.50%. Hogan added that a larger rate cut could be needed if global situations remain problems next month or if domestic data are weaker than expected.
European Markets
European Central Bank chief economist Philip Lane expressed his belief that service sector inflation will continue to slow, citing the results of the recent downturn in wage agreements.
Lian pointed out in a lecture that the current salary settlement in 2025 is "quite low", while the salary settlement in 2026 seems to be more restrained. This shows that the cost pressure in the service industry has been alleviated, which is a key driver of core inflation.
However, Lane pointed out the continued fluctuations in the global economic environment, which eased optimism. He highlighted the recent large fluctuations in exchange rates and energy prices and attributed them to structural changes in the global trading system.
European Central Bank governing www.avaforexcn.committee members Olli Rehn and Yannis Stournaras expressed support for rate cuts in June, provided that upcoming data confirm the current trend of stable inflation and moderate growth. Rehn stressed the importance of maintaining a data-dependent approach in the context of “universal uncertainty” caused by geopolitical tensions and global trade conflicts.
In an interview with Kathimerini, Rehn noted, “If incoming data and macroeconomic analysis confirm the current prospect of stabilizing inflation and slightly suppressing growth, the appropriate response in June will be to continue monetary easing and lower interest rates.
However, he warned against making any assumptions after June. “Let’s stick to data-driven decision-making at every meeting, especially when we find ourselves under a cloud of general uncertainty due to geopolitical and trade wars,” he stressed.
Stournaras agrees with the June rate cut, but suggests that the ECB may temporarily take place after that Stop reassessment. “I believe we will cut interest rates again in June and then I see a pause,” he said.
U.S. market
Canadian retail sales rose 0.8% in March, surpassing the expected 0.6%. Automotive and parts dealers drove the rise with a strong 4.8% quarter-on-quarter rebound. Total retail activity grew steadily by 1.2% in the first quarter, expanding the momentum of quarter-on-quarter growth to four quarters.
However, the underlying trend is not that encouraging. Retail sales, excluding automobiles, fell -0.7% quarter-on-quarter, and well below the expected 0.1% quarter-on-quarter decline.
StatCan's pre-estimated tableNext month, it will rebound slightly by 0.5%.
Chicago Fed Chairman Austan Goolsbee stressed a cautious stance on monetary policy, citing high uncertainty in the economic outlook.
Gulsby said in an interview with CNBC that “everything is on the table”, but the standard for further action is “a little higher” until a clearer situation occurs.
He labeled the stagflation effect of the trade policy shift as a key issue, calling the environment “the worst case for central banks”, adding that policy makers need to carefully evaluate the extent to which tariffs push prices up.
While market pricing The Fed will cut interest rates twice this year, possibly starting in September, Goolsbee avoids pledging any timeline.
He stressed the need for flexibility, saying: "I don't like to tie our hands a little bit at the next meeting. Nevertheless, he insisted that entering April 2, inflation seems to be easing and the labor market is stable, in which case interest rates can be ������ Group�� can "decline" in the next 12 to 18 months.
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