Last week, the US Dollar Index broke through the 100-point mark as the super central bank week approached

Last week, the US Dollar Index broke through the 100-point mark. The core driving factors were still the combined effects of geopolitical disruptions and inflation narratives. Among them, repeated fluctuations in geopolitical news significantly impacted the short-term volatility of the US Dollar Index, with its specific trend showing phased volatility characteristics as the geopolitical situation evolved.

The escalation of geopolitical tensions continues to support the inflation narrative, but at the same time, it is necessary to be vigilant against the risks that may arise from a cooling of the geopolitical conflict narrative.

More crucially, subsequent inflation data, the resilience of the US economy, and consumer strength will directly determine the trend of the US Dollar Index. Additionally, the Federal Reserve's assessment of the impact of rising oil prices caused by geopolitical conflicts on US inflation is also worth close attention.

Subsequent fundamental economic data from the US will become a key variable in determining turning points in the trend of the US Dollar Index. Against the backdrop of a strengthening dollar, the renminbi still maintains strong resilience, with impressive export data from the past one to two months providing significant support.

Overall, the US dollar may maintain relatively strong resilience, while the renminbi, although resilient, will find it difficult to initiate a trend of substantial appreciation in the short term. Going forward, it will be important to closely track inflation trends, US economic performance, and the policy direction of the Federal Reserve. Next week will bring a super central bank week, with policies from various central banks showing divergent trends. Among them, expectations for an interest rate hike by the Reserve Bank of Australia are the strongest, while the Federal Reserve's interest rate decision meeting remains the key focus, particularly the guidance on the future interest rate path.

Key Areas to Watch:

1) Key economic data such as the US PPI index, Federal Reserve interest rate decision meeting

2) China’s consumption, production, and investment data

3) Eurozone price index, European Central Bank interest rate decision

Risk Warning: Geopolitical factors, slower-than-expected domestic economic recovery, overseas policy exceeding market expectations

Author: Pan Xiang, NanHua Research Institute, Z0021448

Important Disclaimer: The content and opinions in this article are for educational and reference purposes only and do not constitute any investment advice. The market carries risks, and investments should be made with caution.

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