Foreign Exchange: How To Trade Dollars After Touching 100?

Breaking the dollar index is a milestone, but it is by no means an end. For today's currency traders, it is clear that there must be a sober understanding now.

This is very important for us dollar pactions to enter the "hundred dollar era".

The US dollar index rose 100 points in the Asian market on Thursday (March 12th), hitting a 12 year high of 100.07.

However, since then, the exchange rate has been depressed by the closing of the profit. It has dropped more than 50 points from its high level, and refreshed its low 99.36. within days.

How to recognize clearly

The paction mode after breaking up hundred years may be a new knowledge for investors at present.

For dollar bulls, what is urgently needed now is "retreat in order to advance".

The obvious point is that many US dollar long market participants set a target position before the dollar broke up, which may be the 100 hurdle.

When such a goal is reached, it may be natural to make profits.

This experience is very common after breaking through key points in various financial markets.

Therefore, you must learn to "retreat" instead of blindly pursuing more.

Tolerance must be tolerated.

There is a certain range of callbacks, leaving room for them.

The rise in the US dollar is not an empty one. It needs stimulus from the fed to raise interest rates.

Of course, the US dollar index.

It will never be a long nightmare.

On the contrary, in terms of the overall trend, this is actually a good opportunity to buy the US dollar at a low price.

The difference between us and European policy has been mentioned repeatedly by market participants in recent days.

No matter how the dollar will fall again, the 30 - year German bond yield is now lower than the two-year US bond yield, which has become a reality.

It is hard to expect any solid reason to stop the flow of funds from the euro area to the US dollar.

Therefore, the main trend of the US dollar is based on buying.

But where is the right place to buy? This is probably the biggest problem in the market.

This may involve the risk tolerance of investors themselves.

Foreign media analyst's chart thinks that at the 98 pass, the upper line of the monthly line (Hong Xian) may be a buying point, and the technical correction of the index may be supported here.

The initial target of the US dollar index is likely to be 101.33 of the 1.618% expansion in the previous period, and the key support is near 94.75.

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Russia has been making waves in the international political situation, resulting in a 46% derogatory reduction of ruble, which has fallen to the lowest level in history.

The currencies of Belarus, Azerbaijan and Moldova, including Ukraine, are outstanding in the devaluation competition of the international foreign exchange market.

Looking at the world, it is difficult to find a bigger currency in addition to Brazil Real and lari, Larry.

The above currencies dropped more than 13% against the US dollar, while the three currencies led by Belarus rouble were over 25%.

The flood of the ruble devaluation flooded the neighbouring countries, and of course caused trouble.

More and more cheap Russian goods are pouring into the surrounding countries, weakening their trade balance.

According to the theory of economics, devaluation helps to reduce the competitiveness of the currency to the rouble, and it will also bring a series of new problems: to push up inflation and pay more for foreign debts.

Charles Robertson, chief economist of Renaissance Capital Ltd., a London based hedge fund, told Bloomberg News:

These countries can do nothing about it, and it will take many years to relax their economic ties with Russia.

These former Soviet countries and Russia have similar economic structure and are highly dependent on the energy export oriented economy.

Therefore, the sharp decline of the current international oil price is also a key factor in the heavy losses of the currency.

Under great pressure, Belarus announced its depreciation in January this year and relaxed capital controls in February.

Yesterday (March 11th), Belarus rouble fell to 15275 against the US dollar, a record low.

Wall Street noted that Ukraine simply raised the benchmark interest rate to 30% last week, and the interest rate is high.

Its currency has dropped to 34.247 against the dollar in February, a record low.

The currencies of Georgia and Armenia have both fallen by 14% in the past year.

To this end, the two countries were forced to raise interest rates.

However, little effect has been achieved.

Per Hammarlund, chief emerging market strategist at SEB AB, Sweden, explains this:

It's a bit like a rubber band: you pull it, but it will eventually come back in vengeance.

They will resist for a while, but the situation ahead will be more serious than before.