Foreign Exchange: Strong Dollar Is Good For America?

"I will repeat what I and all my predecessors have said, that is, a strong dollar is good for the United States," Jacob Lu told an interview with Bloomberg TV host Erik Schatzker at the world economic forum annual meeting in Davos, Switzerland.

At the same time, it pointed out that "our

Compared with other economies in the world, it is much stronger. "

The expression of a strong dollar contrasts sharply with the concerns of many in Davos, who fear that a sharp rise in the dollar may soon begin to damage the US economy.

The US dollar has surged 22% against the euro in the past year to its strongest level in 11 years, while the US dollar rose 14% against the yen.

According to an earlier news from FX168 financial network,

The continued strong trend has led to the impact of American businesses with huge overseas businesses.

The appreciation of the dollar usually damages the demand for US exports and reduces the value of foreign currency denominated foreign exchange earnings into US dollars.

The appreciation of the US dollar makes the products imported by the United States cheaper, which makes the already weak inflation pressure and challenges the exporters because it makes American exports more expensive in the international market.

On the other hand, when the economy accelerates, the appreciation of the US dollar will also accelerate inflation and restrain inflation at the same time, and it should help attract capital to the US.

A day before Jacob Lu's speech, the European Central Bank expanded its stimulus scale and promised to buy up to 1 trillion and 140 billion euros ($1 trillion and 280 billion) of assets, including government bonds.

This dragged down the sharp depreciation of the euro and highlighted the divergence between the euro area and the US in monetary policy, as the market generally expects the fed to start raising interest rates this year.

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On Friday, the index continued to go higher and higher. Although there was a pullback in the trading center, it did not change the rally, and it was rising rapidly near noon.

After the opening of the afternoon, the futures index dived after more than 2%, and rebounded all the gains on that day.

Closing, IF1502 reported 3597, or 0.64%.

Market analysts believe that there are indications that the current market has returned to a balanced pattern.

On Thursday, the rebound in the index futures was convergent, rebounding for three days in a row, covering the shade of Monday, but still under the gap.

The upward trend of the index is constantly consuming, the competition for short-term position may be more intense, or there will be a high level of market volatility.

Technically, the index will continue to shrink and the positions will be reduced. If the index futures further increase or even fill the gap on Monday, we need further coordination.

We should maintain a prudent operation on the basis of short term operation and take the bargain as the main direction.