The U.S. dollar index rose 0.20% to 92.72. The minutes of the Fed’s June policy meeting showed that last month, the members of the meeting believed that further substantial progress in economic recovery was “generally considered to have not been achieved”, but they agreed that they need to be prepared if inflation or other When the risk becomes a reality, take action. After the meeting minutes were released, the US dollar fell slightly, then reversed its trend and rose slightly.

Brad Bechtel, a strategist at Jefferies, said that there was not much new content in the meeting minutes, so the long US dollar positions accumulated in the past few days used to hedge risk were “slightly closed”. As the reinflation transaction subsided, the yield on the 10-year US Treasury bond fell to 1.32%, and it fell below 1.3% for the first time in more than four months.

Kathy Lien, managing director of BK asset Management, pointed out that today’s meeting minutes only confirm that the Fed is very likely to reduce asset purchases sometime this year. The pressure from falling U.S. bond yields, coupled with some recent weak economic reports, may cause the U.S. dollar to react flatly to the Fed’s meeting minutes. But she added that the U.S. economy is recovering from the new crown pandemic in a better state than Europe and Japan, which bodes well for the U.S. dollar; the bottom line is that the market has not responded much, but I don’t think this will hinder the U.S. dollar’s continuation. Uptrend.

Brown Brothers Harriman Global Foreign Exchange Strategy Director Win Thin said that one of the main factors driving foreign exchange trends in the second half of this year will be the separation of global central banks. Some central banks have begun to gradually reduce monetary stimulus measures based on strong economic fundamentals, while others have stayed still. The current U.S. dollar index is more than 3% higher than the last time U.S. Treasury yields fell to such a low level in February. This makes us refocus on the expected performance of the U.S. economy and the Fed's eventual withdrawal of stimulus measures.

All this seems to reiterate the market's expectations, and since the Fed's interest rate resolution in June, this expectation has been largely digested. In response to the announcement of the minutes of the latest Fed meeting, the price movements of the US dollar index, major stock indexes and US Treasury bonds have been relatively moderate, which also supports the argument that this expectation has been digested. The weakening of the dollar’s bullish momentum also indicates that the counter-trend rally may be over. Therefore, investors may consider the forthcoming announcement of the number of initial jobless claims and inflation data as an event risk that may trigger volatility, because the release of these data may affect the Fed’s policy debate on tightening.

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