In the past month, the exchange rate of the euro has continued to fall.
According to the data of British financial institutions, as of Beijing time 16, the exchange rate of the euro against the US dollar has fallen to1:1.161. This week, the exchange rate of the euro against the US dollar 12 was the lowest in recent 15 months. On September 5th this year, the exchange rate of the euro against the US dollar was still at 1: 1. 1803.
As the euro continues to weaken, speculators are accelerating to sell the euro. According to the latest data from the Commodity Futures Trading Commission (CFTC), in September, the net non-commercial position of the euro turned short for the first time, the first time since March 2020. The net long non-commercial position of futures linked to the ICE dollar index soared to the highest level since 20 19 and 10.
Cai Yuli, a researcher in FICC Group of Huatai Futures, said in an interview with China Business News that the recent weakness of the euro was due to the adjustment of monetary policy by the Federal Reserve and the narrowing of the trade deficit between the United States and Europe. In the future, although the European Central Bank is still expected to maintain a loose monetary policy, the euro is expected to strengthen again in the short term because the market has basically completed the pricing of the Fed's debt reduction.
"As the euro is weak, speculators are accelerating their selling of the euro."
In the past month, the exchange rate of the euro has continued to fall.
According to the data of British financial institutions, as of Beijing time 16, the exchange rate of the euro against the US dollar has fallen to1:1.161. This week, the exchange rate of the euro against the US dollar 12 was the lowest in recent 15 months. On September 5th this year, the exchange rate of the euro against the US dollar was still at 1: 1. 1803.
As the euro continues to weaken, speculators are accelerating to sell the euro. According to the latest data from the Commodity Futures Trading Commission (CFTC), in September, the net non-commercial position of the euro turned short for the first time, the first time since March 2020. The net long non-commercial position of futures linked to the ICE dollar index soared to the highest level since 20 19 and 10.
Cai Yuli, a researcher in FICC Group of Huatai Futures, said in an interview with China Business News that the recent weakness of the euro was due to the adjustment of monetary policy by the Federal Reserve and the narrowing of the trade deficit between the United States and Europe. In the future, although the European Central Bank is still expected to maintain a loose monetary policy, the euro is expected to strengthen again in the short term because the market has basically completed the pricing of the Fed's debt reduction.
Why does the euro "keep falling"?
In the short term, Cai Yuli believes that the recent weakness of the euro is related to the adjustment of monetary policy by the Federal Reserve. The unexpected tightening process of the Federal Reserve has driven the interest rate of US debt to continue to rise, which in turn has led to the widening of the spread between the United States and Europe.
After the interest rate meeting in September, Federal Reserve Chairman Powell hinted that the reduction plan would be started in June 165438+ 10, and would end in mid-2022. 10 June 13, the minutes of the meeting released by the Federal Reserve showed the road map for the first time. This road map clearly mentions that the Fed's net asset purchase rate will gradually decline in the future. Starting from June 5438+065438+ 10 at the earliest, the Federal Reserve will reduce its monthly purchase of US Treasury bonds 1000 billion US dollars and the institutional MBS50 by 5 billion US dollars.
On the other side of the Atlantic, the European Central Bank still maintains a loose monetary policy environment. European Central Bank President Lagarde reiterated in an interview with German media recently that premature tightening of monetary policy may damage the economic recovery of the euro zone. Lian En, chief economist of the European Central Bank, also said a few days ago that inflation in the euro zone is temporary and the European Central Bank has no intention of adjusting the current monetary policy.