The Holiday Mode Has Already Started, But The Dollar Is Still Weak, But It Is Still Stable.

At the end of the year, Christmas and new year's day came, the holiday mode had already started, but behind the quiet market, the dollar was not calm.

This week, the US dollar continued to weaken, or recorded the worst monthly performance in April. However, with the expectation of the Fed's interest rate rise, the annual increase is expected to reach 10%.

Crude oil and other commodities have recently picked up slightly, supporting commodity currencies such as Canadian dollar and Australian dollar.

The central bank decided to extend foreign exchange trading hours on 4 January and further introduce qualified foreign subjects, which has limited market impact.

As of Thursday, the renminbi recorded a five consecutive rise, but the paction shrank. The main theme of maintaining stability remains open next year.

In the shadow of the Fed's interest rate increase and China's "811 exchange rate reform", it will be difficult for the yuan bear to end next year.

With the US Federal Reserve raising interest rate boots landing, traders making a profit on the US dollar long positions, plus the end of holiday mode, the US dollar fell this week, and the US dollar index has fallen more than 2% so far this month, which is expected to record the biggest monthly decline in April.

However, with the support of the Fed's rate hike earlier this year, the US dollar is expected to achieve a year-round increase of nearly 10%.

In stark contrast, the euro, the yen and emerging market currencies and commodity currencies were spared.

Of course, the reason can not be entirely attributed to the Fed's rate hike expectations and the dollar's rise, commodity slump, China's economic downturn and other factors are also to blame.

"

This year's overall performance is excellent, but when the 2016 comes, almost no one thinks that the dollar will repeat the strong force of 2015, "said Simon Smith, chief analyst of retail trading platform FXPro.

After the Fed raised interest rates, the focus of today's market has shifted to the pace of subsequent rate hikes.

A US government report on Thursday showed that the number of jobless claims in the US last week was close to a 42 year low, indicating that the employment market in the world's largest economy continues to tighten.

Employment data is one of the important considerations of the Federal Reserve's interest rate raising policy.

Reuters poll shows that 2/3 of the surveyed analysts expect the fed to raise interest rates again in the next three months, but many analysts believe that interest rates will not rise faster next year as policymakers suggest.

Fed policymakers now expect the interest rate to be 1.25-1.50% at the end of 2016, but the median value of analysts surveyed by Reuters is expected to be 1.00-1.25% at the end of 2016.

The recent decline in the US dollar has also been achieved.

And commodity currencies.

The Asian currency rose this week, and the rupiah hit a month high.

Moreover, oil and other commodities have rebounded after a wave of fierce sell-off, and the buying and selling of large and medium investment investors have pushed up the Australian dollar and New Zealand dollar gradually.

The Australian dollar has risen 2% since hitting lows last week, and the New Zealand dollar has been close to a two month high.

But throughout the year, global growth sluggish, commodity prices tumbled, the US dollar strengthened and some countries' political environment, coupled with worries about China's economy, dragged heavily on emerging market currencies.

For example, Brazil's real estate fell 33%, South African rand fell nearly 24%, Turkey lira fell 20%, and Russian rouble also dropped 14%.

The renminbi continued to rise against the US dollar this week, but the volatility is still narrower.

Traders said that China's major banks have continued to settle their foreign exchange to support the exchange rate, reflecting the intention of the central bank to maintain stability.

So far this year, the yuan has fallen by more than 4%, without accident.

"This is the case this year. You see that the US dollar / RMB will not fluctuate, so you can't make money. Why bother?"

A stock line trader pointed out that "before the end of the year, there was a demand for more US dollars / RMB before the end of the year.

Another Chinese bank trader pointed out that

After the increase in interest rates, the RMB volatility has also narrowed down, and the annual task is almost completed. Traders' interest in trading is generally not high, and the enthusiasm for turnover is limited. By the end of the year, it is estimated that the RMB will still fluctuate around 6.48 yuan.

As for the market outlook, the 811 exchange reform undoubtedly opened the "Pandora box" of the devaluation of the RMB, plus the first time the Federal Reserve started raising interest rates in the past 10 years. The bear road of the renminbi seems to be still difficult to end in the coming 2016. Its devaluation exceeds expectations, which is obviously a major risk facing the global foreign exchange market next year.

The dilemma of the Central Bank of China will also continue: on the one hand, we must carry out the policy intention of the exchange rate marketization; on the other hand, the pressure of capital outflow will make the "central Mama" still have to intervene repeatedly to maintain stability.