The US Dollar Is Bullish And The Market Risk Appetite Is Warm.

The recent turmoil in the global market has led many investors to "waver".

In a report, analysts at ANZ pointed out that "it will be some time before we can know which places have an indelible impact, but at the same time, it is a reminder that the market should not be too sure about when the Federal Reserve will start raising interest rates or where the G3 currency will go."

On Friday (August 28th), the US dollar index continued to stabilize near the weekly high level in the Asia Pacific region, mainly due to the recently released US economic data optimism, and investors continue to reduce the yen and other hedge currencies.

Commodity currencies such as the Australian dollar were better than the US dollar in the day, so the strong rebound in the stock market in the former China boosted the overall risk appetite of the market. At present, the US dollar index is at the level of 95.65, which is not far from the high of 96.03 a week. The dollar index has risen by more than 3% since the 7 month low of 92.67 on Monday.

The dollar / yen rebounded to 121 above the day, away from Monday's low of 116.15. Published within days data Japan's inflation rate fell to zero, the slowest growth rate in 2 years, but the yen did not respond to this.

"The two quarter GDP data of the United States are just as positive as those previously announced," said Citigroup analyst in a research paper to clients. "Fed is the result of what we want to see."

But several Federal Reserve After a slightly cautious speech, the market raised interest rates in September. Expect Some officials have mentioned the global market turmoil and China's economic slowdown.

Ayako Sera, a senior market analyst at Sumitomo trust and Mitsui, said: "there is reason to believe that the Fed will avoid raising interest rates in such an environment, but I feel that the Fed's external communication is not clear."

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As the Central Bank of Thailand relaxed the restrictions on domestic investors entering the overseas market, the market feared that the capital flight would deteriorate further, causing the Thai baht to fall and refresh its lowest level in six years.

Morgan Stanley said this month that after the devaluation of the yuan, ten emerging economies faced greater risk of devaluation, including the Thai baht.

Shigehisa Shiroki believes that the baht will further degrade to 36 in the next few months.

Pongpen Ruengvirayut, deputy governor of Thailand's central bank, said on Friday that Thailand's central bank will allow wealthy individuals and enterprises to invest directly in overseas markets, including overseas stock markets, bond markets, mutual funds and other financial assets. The amount of overseas direct investment is limited to $5 million per year.

However, the Thailand central bank's plan has increased the market's concern about the increase in the country's capital outflow. The baht again suffered a sell-off. During the afternoon trading in Bangkok, the Thai baht dropped 0.6% to the US dollar, erasing all gains this week to 35.858. The Thai baht hit 35.94 earlier, the weakest level since March 2009.

Shigehisa Shiroki, assistant general manager of Mizuho bank's Bangkok Treasury Department, told Bloomberg that Thailand's central bank is more willing to let domestic funds flow out of its territory through its own nationals rather than allowing overseas investors to easily transfer funds. The orderly decline of the number of currencies is acceptable to the Central Bank of Thailand.

Thailand's central bank has cut interest rates twice this year to suppress the Thai baht exchange rate, thereby stimulating its exports.

In the wake of the massive withdrawal of international capital from emerging markets, the devaluation of the Thai baht is also one of the stimulant factors for the acceleration of capital leaving Thailand. The Thailand exchange data show that the net capital outflow of international investors withdrawing from Thailand this month amounted to US $1 billion 220 million, the largest monthly outflow of funds since 2013. In addition, overseas investors sold Thailand bonds worth 451 million US dollars.

The Thai baht has been under pressure of depreciation recently. Early last week, a major explosion occurred in the main shopping district of Bangkok, capital of Thailand, on Monday night, killing 27 people. The Thai baht refreshed its six year low by 35.52. This year, the baht has fallen by 8.2%.

Another reason for the depreciation of the Thai baht lies in the fact that the interest rate trading in emerging markets is now heading for "death." As the Fed raises interest rates, developing interest trading in emerging markets is becoming increasingly unattractive. The market expects that the Fed's earliest interest rate increase may be September.