Zhou Commentary: The Euro Leads The Non US Currency &Nbsp; The US Dollar Index Is Now Down Sharply.

The popularity of high-risk currencies has improved because of the good auction of Portuguese and Spanish bonds.

The euro has become the leader of the rebound in non US currencies.

Portuguese bond auction results show that the yield of government bonds due in 2014 was 5.396%, higher than the 4.041% last time.

The Portuguese finance minister said the success of the bond auction was successful, while the Portuguese Prime Minister stressed again that Portugal did not need external assistance, and only needed confidence.

Subsequently, the auction of bonds in Spain and Italy further stimulated the optimism of the market.

Spain has successfully sold 3 billion euro five year bonds, and the market needs strong demand.

Later, Italy also successfully sold 6 billion euro five - and 15 - year bonds.

Worries about the euro zone's sovereign debt problems have been eased, and the euro has risen sharply. In addition, the European Central Bank's Trichet said that the euro is facing short-term inflation pressure, which has raised the expectations of the European Central Bank's interest rate rise and contributed to the euro's rise.

The foreign exchange trader of the Bank of China indicated that from the technical analysis, the euro and the US dollar were blocked by the upper 1.34 after hitting 1.3384.

If a breakthrough can be made in the short term, it is expected to break through the high of 1.3433 at the beginning of the year. Otherwise, the euro will start a new round of decline, and the bottom line should have strong support on the 1.30 front line.

The decline of the dollar is due to the instability of the employment situation

While the non US currency rebounded, the US released some of the poor economic data.

Statistics show that although the US economy has achieved some growth, its ability to continue to increase is not as good as expected.

The number of unemployed Americans hit a 10 week high last week. In the week of January 8th, the number of unemployed Americans initially increased to 445 thousand, which is the largest weekly increase in the number of jobless claims in six months.

In December, the US producer price index was higher than the previous month, rising by 1.1%, indicating that the economy has some resistance.

The graphic analysis of Bank of China's foreign exchange analysts shows that the US dollar index still has strong support near 78.5, and the US dollar is expected to slow down after several consecutive days of decline.

Analysts say the US dollar index is expected to rebound when the good news comes out next week.

Asian currencies benefit from increasing interest rates in Asian countries

The economic recovery in the US has been blocked for a long time. The increase in interest rates this week by South Korea and Thailand shows that some Asian countries are basically out of the shadow of the financial crisis.

South Korea and Thailand raised interest rates by 25 basis points on Wednesday and Thursday respectively, meeting market expectations.

Economists at the ANZ bank pointed out that the two countries' economic performance was better than expected and began to focus on inflation and other issues.

At the same time, a large amount of capital is flowing into emerging markets such as Asian countries. It is expected that Asian countries will continue to raise interest rates in the coming year, and Asian currencies will probably benefit from it.

The renminbi began to climb again on Wednesday after a brief decline in the beginning of the week.

In January 14th, the central parity rate of RMB against the US dollar was 6.5896, and it was 101 basis points on the basis of the previous trading day.

Foreign exchange traders said that the yuan has been even more innovative against the US dollar in recent years, and the dollar is still strong in the market.

At the same time, the people's Bank of China issued a notice on the 13 day that in order to cooperate with the pilot of RMB settlement in cross-border trade, and facilitate the banking financial institutions and domestic institutions to carry out the RMB settlement business of overseas direct investment, the people's Bank of China has formulated the "measures for the pilot management of RMB settlement of foreign direct investment".

The gradual opening up of China's capital account has been interpreted by the market as accelerating the internationalization of RMB.

Morgan chase economist Xu Sheng believes that the next step is that China will allow RMB to flow under capital account to some extent.