USD New Year'S Strong Start, Draghi Or Take Action

The US dollar hit a nearly nine year high against a basket of currencies on Friday (January 2nd), thanks to strong US economic performance and the continued divergence of monetary policy prospects among major economies.

Among them, the euro fell to two and a half lows against the dollar again, as the European central bank governor Delaki reiterated in the latest interview that the central bank is ready to take action at the beginning of the year if necessary.

The dollar started strongly in 2015.

The performance in 2014 was brilliant, and the US dollar index rose nearly 13%, the best year since 1997.

The US dollar index rose to 90.67 during the day, the highest since March 2006.

Callum Henderson, global head of foreign exchange research at Standard Chartered Bank in Singapore, said that "a lot of themes near the end of the year are still prevalent."

"The pace of recovery in the United States is not surprising, but it is obviously much better than the majority of the 10 member states of the group of 10 (G10)," said Henderson, speaking of the market's concerns about the differences in macroeconomic performance.

The contrast between the Fed's interest rate hike and Europe's and Japan's stimulus policies supported the US dollar last year, and this trend became the theme of 2015.

The recent comments made by the European Central Bank and the governor of the Bank of Japan in a recent newspaper interview revealed a sharp contrast.

Delaki, President of the European Central Bank (ECB), told the Handelsblatt that the risk that the central bank could not complete the task of maintaining price stability was higher than half a year ago.

He also reiterated that the central bank was ready to take action at the beginning of the year if necessary.

Delaki also pointed out that the purchase of QE is one of the tools ECB may use to perform its duties, but it must avoid providing financing to the government, which is prohibited by the EU treaty.

The ECB meeting will be held in January 22nd.

The market bet that the bank will finally decide to buy sovereign debt, just as the United States, Britain and Japan did.

The euro was 1.2050 against the US dollar, down 0.4% during the day.

Earlier on Friday, the euro touched a low of around 1.2047, the lowest since July 2012's low low of 1.2042.

Saxo Capital Markets foreign exchange dealer Jeffrey Halley said that in light market conditions, the euro fell faster after the stop loss trigger was triggered.

"Because many market participants are still on holiday, liquidity is still scarce," Halley said.

The euro also fell with the euro in the euro area, and the dollar rose against the Swiss Franc since December 2010. The EBS platform reported 0.9982, which was only a step away from parity, which reflected the overall strength of the dollar.

In the Asian Pacific currency, the US dollar rose 0.4% to 120.32 within the first day of the day.

The US dollar and Japanese yen hit a seven year high in early December, rising 13.7% over the past 121.862014 years.

The Bank of Japan unexpectedly expanded its monetary stimulus at the end of October to maintain inflation expectations.

The rally accelerated at the end of last year.

Kuroda Higashihiko, the governor of the Bank of Japan, said in a daily news interview on Thursday that if he really wanted to loose monetary policy again, the central bank had various tools to be used, and Hetian emphasized its determination to achieve inflation targets in the next fiscal year.

Kuroda Higashihiko also reiterated that the Bank of Japan is ready to expand stimulus measures again when necessary to achieve a 2% inflation target and exclude the possibility of the central bank's deregulation to achieve its inflation target commitments for the next fiscal year.

However, most analysts are highly skeptical about whether the central bank can achieve its goals in this time frame.

A number of economic data will be released in Europe and the United States during the day. Investors should pay close attention to this.

In Europe, investors can focus on France, Germany and

A series of manufacturing PMI performance, if the data is weak, will increase the probability of the European Central Bank to launch QE as soon as possible.

Generally speaking, the terminal value usually does not deviate from the initial value too much, but if there is less than the initial value, there is another reason for investors to empty the euro area.

With the ECB likely to launch quantitative easing in early 2015, investors may begin to increase the euro's shorts, and any reason to do so will be caught.

Besides,

The UK's manufacturing PMI and central bank mortgage lending data are also concerned. Although the UK economy is strong in Europe, the trend of the pound has continued to weaken because the Bank of England has postponed raising interest rates. If the data is again weak, the pound may continue to bear pressure.

In the US side, investors should pay close attention to three important economic data released by the US, including Markit manufacturing PMI, construction expenditure and ISM manufacturing PMI.

Recently, the general strong economic data in the United States show that the timing of raising interest rates for the Fed is getting closer and closer to the market.

If data continue to perform well, the US dollar is expected to continue to be strong in anticipation of an early rise in interest rates.