Foreign Exchange: Yen Depreciated, Euro Rebounded &Nbsp, USD Or Oversold.

The yen is going down.

Compared with other developed countries, Japan's financial situation is worse. But because its 95% debt is held by domestic debtors, it has the highest proportion in developed countries, and Japan's credit rating has remained high.

This week, however, standard & Poor's announced that Japan's sovereign rating would be lowered from "AA" to "AA-", confirming that the short-term rating is "A-1+" and the long-term rating outlook is stable.

Standard & Poor's says this reflects mainly concerns about the further rise in the Japanese government debt ratio and believes that the ratio will not reach the top until mid 20s.

After the announcement, the Japanese yen fell, causing the market to be volatile, and the news was further fermented in the market.

Bank of China's foreign exchange traders pointed out that, overall, the Japanese economy has not been able to go out of the trough. Once the global risk sentiment is released, the possibility of yen weakening is greater.

From a technical point of view, if the US dollar and Japanese yen can successfully stand above 83 yen, the yen market will continue to depreciate.

The euro's downtrend is suspended.

While the sovereign rating of the Japanese yen is down, the German AAA's sovereign rating is stable, boosting the euro further.

Market participants generally believe that the euro has gained more support from Asian countries in this round of decline, and the situation in the euro area has been greatly relieved.

In January, Vice Premier Li Keqiang came to Spain, the first place on the euro, and stressed that China is a long-term and responsible investor in the Spanish bond market. It will continue to buy as the case continues. In the middle of January, Japan also promised to buy more than 20% of the first batch of bonds issued by the European monetary stability fund.

China and Japan will undoubtedly boost their confidence in the market.

In addition, the euro area's overall inflation rate reached 2.2% last month, which is higher than the 2% limit of the European Central Bank.

The official attitude has increased the market's expectation of the eurozone's interest rate, and also provided a reason for the euro to go up.

In early January this year, the euro fell further to the US dollar to around 1.28, breaking the new low since the fall.

Since then, dramatic changes have taken place in the market. The euro has suddenly launched a massive counterattack against the US dollar, and now it has reached 1.37. The euro consensus has no longer existed, and the euro has risen strongly against the US dollar for 2 consecutive weeks.

Bank of China traders confirm that the euro rally is still the mainstream sentiment in the near future. The euro is 1.3833 against the US dollar in the short term. If the breakthrough is successful, it is expected to return to 1.40.

US dollars or oversold

The recent rebound in the dollar was very weak, and finally fell below the bottom track support that lasted for more than two months, and the US dollar index reached a minimum of 77.

Analysts expect the dollar to have a bigger risk of a recent downturn, but the fundamentals do not support the weakening of the US dollar.

The US Federal Reserve kept its ultra-low interest rate unchanged at the first meeting of interest rates held on Wednesday, and continued to implement the second round of quantitative easing policy of $600 billion, which is in line with market expectations.

But to the market's surprise, the Fed has only slightly raised its assessment of the US economy and is still worried about high unemployment.

At this meeting, all members of the Fed voting committee agreed to continue to implement the government bond purchase plan, which is the first time that no objection has been held since December 2009.

The foreign exchange trader of Bank of China indicated that the US dollar has reached the oversold area after nearly three weeks' adjustment from the US dollar index.

In the short term, if the GDP data released in the 29 quarter of 2010 are better than expected in the fourth quarter of the year, it is possible to promote a short rebound in the US index. Investors are advised to pay close attention to the data that night and timely follow up the opportunity to make more dollars in the short term.