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The US dollar rebounds strongly, the euro falls under pressure, and the Federal Reserve maintains a hawkish tone
industry6 months before
Summary：Affected by the hawkish stance of the Federal Reserve, the US dollar index broke through the 104.20 mark, and both the euro and pound fell against the US dollar. The market is betting that the United States will maintain a high interest rate policy for the long term.
May 20, 2025, New York NewsThe US dollar rebounded sharply in global markets on Monday, supported by the latest CPI data from the United States and hawkish statements from Federal Reserve officials. **The US Dollar Index (DXY) * * rose 0.58% during the day, breaking through 104.20 and approaching the key resistance level of 104.50, marking the fourth consecutive trading day of gains.
Federal Reserve Governor Michelle Bowman publicly stated over the weekend, "We are still far from achieving our 2% inflation target, and there is no reason to cut interest rates at this stage." The market interpreted this as the possibility that the Federal Reserve mayMaintain the current interest rate level before the third quarter of 2025There may even be signals of another interest rate hike.
The annual core CPI rate in the United States reached 3.6% in April, higher than the expected 3.4%. After the data was released, the yield of US 10-year treasury bond bonds rose to 4.47%, which is sensitive to interest ratesShort term pressure on technology stocksAnd the attractiveness of US dollar assets has significantly increased.
In terms of major currency pairs:
EUR/USDBreaking below 1.0850, reaching a low of 1.0812, which is a new low in the past three weeks;
GBP/USDIt fell for the fourth day in a row to 1.2670;
USD/JPYStanding on 156.20 again, although the Japanese authorities did not intervene directly, the market began to warn of possible exchange rate regulation remarks.
**Goldman Sachs * * pointed out in its latest strategy report that if the Federal Reserve maintains its high interest rate policy until the end of 2025, the strength of the US dollar will continue into the second half of the year, especially putting pressure on the weak economic recovery in the eurozone.
This week, investors will focus on the upcoming announcement on WednesdayMinutes of the Federal Reserve FOMC Meeting, as well as Friday's in the United StatesPCE Price IndexTo evaluate the path of interest rates and inflation trends.
📌 Analyst opinion: The US dollar is regaining global pricing power, and risk assets may face valuation pressure in the short term. The foreign exchange market will be dominated by hedging logic.
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