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Hello everyone, today XM Forex will bring you "[XM Group]: I haven't seen a new trade agreement yet! The US dollar has gained breathing space." Hope it will be helpful to you! The original content is as follows:
On May 20, during the European session on Tuesday, the US dollar index hovered above the 100 mark.
Moody's downgraded U.S. long-term issuer and senior ratings from Aaa to Aa1 on Friday, as U.S. government debt grew by $36 trillion. The move has raised concerns about investing in U.S. assets and has pushed up U.S. bond yields. After the rating downgrade, the initial response to the 10-year Treasury yield was strong, hitting a more than month high of around 4.56%. After the initial shock, the yield has fallen back to around 4.45%.
Another reason why the US dollar continues to be at a disadvantage is China accusing the United States of undermining high-level trade negotiations held in Geneva last weekend. Beijing’s allegations in Washington come after the U.S. Department of Commerce commented last week that discouraged Huawei Technologies’ artificial intelligence (AI) chips and Chinese artificial intelligence models. According to a spokesman for the Chinese Ministry of Commerce, the U.S. Department of Commerce’s recommendations were “discriminatory” and “market distortion”, prompting Beijing to “request” the government to “correct mistakes.”
A report by Bloomberg last week showed that the U.S. Department of Commerce said it was issuing guidance to clarify that "use of Huawei Ascend chips violates U.S. government export controls." The agency also warned the public about the potential consequences of allowing American AI chips to be used for training and reasoning of Chinese AI models."
In the meantime, investors are looking for new clues about how much the Fed will cut interest rates this year. Many Fed officials urged to be patient as they need more data to assess the economic outlook after major changes in economic policies. on MondayInflation will now take longer to recover to 2%, and is expected to cut interest rates once this year, said Atlanta Fed President Raphael Bostic.
The Australian dollar fell 0.5% to $0.64,255, after the RBA lowered interest rates as expected, citing a bleaker global economic outlook. However, the RBA remains cautious about further rate cuts.
The British pound rose against other currencies, with the exception of the Japanese yen, hovering around 1.3380.
Euro/USD fluctuated narrowly around 1.1250 during the European period, after closing in the positive area on Monday.
Oil prices rise and fall. Investors are worried that the U.S.-Iranian nuclear talks could break the talks and weaken the possibility of Iran's crude oil supply. Gold prices fell 0.3% to $3,218 as safe-haven demand fell.
Euro: The intraday bias of the euro/dollar remains neutral at present. On the plus side, a decisive breakthrough of 1.1292 resistance should indicate that the correction from 1.1572 has been completed after defending the 38.2% retracement level of 1.1039 from 1.0176 to 1.1572. The intraday deviation will turn back to the upside, and then retest 1.1572.
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