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Hello everyone, today XM Foreign Exchange will bring you "[XM Foreign Exchange Market Analysis]: CPI and unemployment benefits data push up the Federal Reserve's bet on interest rate cuts, and the US dollar weakens." Hope it will be helpful to you! The original content is as follows:
On the Asian session on Friday, the US dollar index remained weak, and the US dollar weakened against major currencies such as the euro and the yen on Thursday. The previously released U.S. inflation data for August was slightly hot, and the initial unemployment claims data were weaker than expected, strengthening the Fed's view that interest rate cuts will resume next week. This trading day is 8 years old and the initial value of the University of Michigan Consumer Confidence Index in the United States in September, and pay attention to news related to the geopolitical situation.
Dollar: As of press time, the US dollar index hovered around 97.56. Although the current inflation data is stabilizing, the surge in the number of unemployment claims highlights the weak labor market. Traders' confidence in the Federal Reserve's at least 25 basis points next week is increasing. U.S. Treasury yields may gain some support near current levels, but unless labor market data stabilizes, the U.S. dollar index may test the support level of 97.109 again. In the short term, unless the US dollar index can clearly break through the resistance range of 97.859-98.100, it will be difficult for the bearish tone of the US dollar to change. From a technical analysis, the US dollar index is still under pressure: 97.859 has changed from support to resistance, and the next key support is this week's low of 97.253; if the support level is broken, the US dollar index may further fall to the main bottom position of 97.109. Currently, the US dollar index price continues to run below the 50-day moving average (98.100), and shorts still dominate below this key threshold.
On September 11, local time, Ukrainian President Zelensky met with visiting Ukrainian Special Envoy Kellogg. The two sides had in-depth discussions on how to achieve peace and strengthen Ukrainian security. Zelensky said that the talks between the two sides focused on cooperation in multiple directions, including providing funds for the production and procurement of the "Patriot" air defense system under the "Ukraine's priority demand list" mechanism, and the bilateral agreement proposed by Ukraine to jointly produce drones and weapons with the United States. Zelensky stressed that Ukraine expects the positive response from the United States. Zelensky also said that the tripartite leaders' meeting is the most efficient form of ending the conflict.
According to five U.S. Republican officials, Republican leaders are planning to file a temporary fund next weekA bill was issued to vote for the House of Representatives to extend government funds until November 21, that is, Friday before Thanksgiving. House Appropriations stofoco.committee Chairman Cole confirmed Thursday that a vote will be held next Monday.
The Turkish Central Bank issued an announcement stating that the Monetary Policy stofoco.committee decided to lower the benchmark interest rate from 43% to 40.5%, a decrease of 250 basis points. In a statement, the central bank pointed out that although the growth rate of GDP in the second quarter was higher than expected, domestic demand was still weak in the end. The latest data shows that although the current demand environment helps to drive inflation back, the rise in food prices and the price inertia of some service items still put upward pressure on prices. The central bank will continue to maintain a tight monetary policy stance until the price stability target is achieved. The central bank said the existing macroeconomic framework would support the continued decline in inflation, with the interim goal of reducing inflation to 5% within the foreseeable period.
The ECB decided to maintain the key interest rate at 2% at the meeting of the Management stofoco.committee on September 11, 2025, continuing the policy of suspending interest rate cuts since June. Previously, the ECB had cut interest rates by half over the past year. President Christina Lagarde said at a press conference: "We continue to be in a good state, inflation is at the level we hope, and the economy in the region is performing soundly." She pointed out that the eurozone economy has shown resilience, manufacturing and services continue to expand, and private consumption provides support for growth. Lagarde stressed that global trade uncertainty has eased, especially after the EU reached a partial tariff agreement with the United States, the risk of trade retaliation has dropped significantly. This provides the ECB with more time to assess external factors such as U.S. tariffs, increased German government spending, the upcoming Fed rate cuts and the impact of French political turmoil on the eurozone economy.
The recent political chaos in France has pushed up the country's government bond yields, attracting market attention. Lagarde said that the eurozone sovereign bond market is currently “ordered and liquidity smooth”, implying no immediate intervention is needed. Economists believe that given the current situation of high debt and low growth in France, the current situation does not meet the conditions for central bank intervention. French political risks may be transmitted to other countries in the euro zone through financial markets, increasing the stofoco.complexity of the European Central Bank's future policy formulation. Economists from Morgan Stanley said that volatility in the French bond market may have a greater impact on the eurozone economy by early 2026 and need to be closely monitored.
Deutsche Bank analyst Wall said in a report that the latest forecasts from the ECB show that interest rates may remain at lower levels for a longer period of time. On the one hand, staff's recent forecast for overall inflation has been slightly raised, which means 2The degree to which the inflation target in 26 is lower than expected has been reduced. However, lowering the core inflation forecast to 1.8% in 2027 suggests that this lower-than-expected situation may be extended. "This may have a dovish impact on monetary policy," he said. However, the ECB is not in a hurry to make a judgment and the interest rate suspension may continue.
Dutch International Group analyst Pesolai said that before the fall budget was announced on November 26, the pound is still at risk of falling due to concerns about the sustainability of the UK's fiscal. He said the pound has recently strengthened against the euro as long-term UK government bonds rebounded from last week's sell-off. stofoco.compared to the euro and the dollar, the pound is more sensitive to long-term Treasury sell-offs, which means risks remain before the budget is announced. However, during a period of stable Treasury bonds, short-term interest rates rose, making selling of the pound "expensive" due to the Bank of England's cautious stance on interest rate cuts.
Raobank analyst Jane Foley said that the Russian drone entry into Polish airspace may provide some support to the US dollar because the US dollar's safe-haven status has not changed. At the request of Poland, the UN Security Council held an emergency meeting on Thursday. "This reopens the debate around the dollar's safe-haven status," Foley said. She said it is necessary to worry about this situation given the relatively large spread of credit defaults in the United States. However, Foley said the depth and liquidity of the U.S. asset market and the influence of the U.S. dollar as a trading currency mean that even if the status of the U.S. dollar or U.S. Treasury declined slightly, it would be difficult to replace their position as a safe haven currency.
(Editor: Xiao Qi
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