The Nuclear Bombs Will Be Detonated In The Foreign Exchange Market.

FX168 news Thursday, the European Central Bank [micro-blog] resolution has been made. foreign exchange The market has experienced a "bloody storm", and the impact of non-agricultural data on Friday will be no worse than this. This data is known as the "crown jewel" in all economic indicators that foreign exchange can respond to, which is extremely important to the future Fed policy, and the non-agricultural data often "ravages" the entire financial market like the wind and cloud. Faced with this heavy risk event, should investors consider hiding in the "air raid shelter"?

Delaki pigeon rhetoric detonated euro decline

The euro / dollar plunged sharply on Thursday (April 3rd), after the European Central Bank (ECB) kept interest rates unchanged, and the bank president Delaki (Mario Draghi) issued unusual pigeon remarks. The weakening of the euro helped the US expand its popularity. The non farm employment data on Friday played a decisive role in the further rise of the US dollar.

Market participants increasingly believe that US economic growth will accelerate as the effects of winter cold weather fade. According to media analysts' expected median, US non farm employment growth in March was 200 thousand, the largest in four months.

The European Central Bank maintained its benchmark interest rate at a record low of 0.25% on Thursday, but Delaki told reporters at a press conference after the policy meeting that he and his colleagues decided to do everything possible to prevent low inflation from going on for a long time. The tone of Delaki's speech has changed considerably since last month. At that time, he set a very high threshold for action.

Delaki, the governor of the European Central Bank, said the CMC agreed that it would use all available policy tools including "unconventional measures" and within the terms of reference to effectively cope with the risk of low inflation for a long time. Non traditional tools include quantitative easing (QE) for printing money to buy assets. Some policymakers thought that this would be undesirable and would be considered only if the downward trend of prices could not be checked.

"We still believe that the slow response of the ECB to low inflation is not necessarily risky," Barclay s Capital said in a report. "It is expected that non-traditional monetary easing will be implemented before the end of the year."

Kathy Lien, managing director of BK AssetManagement, said: "the ECB's attitude towards inflation is slightly milder than market expectations. The most interesting concern is that the ECB is considering non-traditional measures, which are unfavorable to the euro / dollar."

The euro / dollar has been trying to explore the key 1.40 level in recent weeks. Since 2011, the euro has not been able to overcome this level. But on Thursday, during the press conference of the European Central Bank President Delaki, the euro / dollar fell below the 1.37 barrier and the exchange rate in early Asia on Friday rose slightly to that level.

The fall of the euro pushed the US dollar index (80.4700, 0, 0%) to its highest level since February 27th. The US dollar / yen also broke through 104, the first and the latest 103.90 since January 23rd. Over the past two weeks, the strong dollar / yen has been the main market for major currencies.

On the 19 th of March, the FED chairman Yellen (Janet Yellen) hinted to the market that the Fed might raise interest rates next spring. dollar The yen has risen by about 3%.

Non-agricultural forward-looking indicators better

Friday's non farm data will undoubtedly be the "big shot" of the foreign exchange market this week, which is the key factor determining the speed of the FED's reduction of the debt purchase plan. With the warming of the weather and the continuous improvement of economic data, investors are also more optimistic about the forecast of us non farm data. Most economists expect that the number of non farm payrolls released in the United States this week will be between 170 thousand and 200 thousand, even if the figure is expected to reach 250 thousand in March.

The growth rate of non farm jobs in the US slowed sharply in December and January, the worst performance in three years, but was greatly affected by the extreme weather in winter. According to the data released by the labor department in March 7th, the number of non farm employment increased by 175 thousand in February and 149 thousand in the United States. The unemployment rate in the United States in February is 6.7%, which is expected to be 6.6%.

Analysts forecast an average increase of about 200 thousand jobs in March, and the unemployment rate fell from 6.6% in February to 6.6%. U.S.A The Ministry of labour is scheduled to announce the non farm report in March at 20:30 on Friday, Beijing time.