Focus today

On January 30 and February 3 of last week, the Asian dollar rose, while other currencies generally fell; The price of gold and crude oil both showed a downward trend. Foreign exchange: the US dollar index rose to 103.00; EURUSD fell to 1.0793; Sterling fell to 1.2050 against the US dollar; The dollar rose to 131.14 against the yen; The dollar rose to 1.3401 against the Canadian dollar; The Australian dollar fell to 0.6922 against the US dollar. Precious metals: gold fell to 1864.86 against the US dollar. Crude oil: Brent crude oil fell to 79.68.

Dollar index (DXY):

Dollar

The US dollar index jumped to around 103.00 on Friday, as the strong non-agricultural employment report provided upward support for the US dollar.

The U.S. Bureau of Labor Statistics pointed out that the non-agricultural employment in the United States increased significantly in January, including 46000 commodity production jobs, 25000 construction jobs, 397000 private service provision jobs and 30100 retail jobs. Employment growth in January was widespread, mainly in the leisure and hospitality, professional and business services, and healthcare industries. Employment in government departments also increased partly, reflecting the return of striking workers.

In terms of financial event data last Friday, the U.S. Bureau of Labor Statistics announced that the non-agricultural employment in January rose sharply to 517000 than expected, and the employment in private enterprises and manufacturing rose to 443000 and 19000 respectively (the reported labor participation rate rose to 62.4%; the unemployment rate fell to 3.4%), reflecting the development and growth of the manufacturing and service industries. The average monthly rate of hourly wage rose to 4.4% and 0.3% respectively than expected, indicating a slight increase in wages. In addition, ism of the US Supplier Management Association announced that the non manufacturing PMI in January was higher than expected to 55.2, reflecting the improvement of service industry activities.

From the upward direction, the upper pressing (upper resistance) is 103.00103.50; From the downward direction, the lower support is 102.70.

EUR/GBP:

After closing slightly higher against Sterling last Friday, the euro closed at around 0.8956. Based on the strong non-agricultural data in the United States last week, there was limited upward space for the euro and sterling.

The U.S. Department of labor announced that the growth rate of January's non farm employment report was much higher than expected, putting pressure on the short-term volatility of non-U.S. currencies. Nevertheless, the euro was supported by a reduction in interest rate differentials between Europe and the United States. The US Federal Reserve announced a 25 basis point increase in interest rates and began to slow down the pace of tightening monetary policy. As the European Central Bank raised interest rates more sharply this time, the interest rate gap between the United States and Europe narrowed and the euro exchange rate strengthened. In addition, the Bank of England raised interest rates for the 10th time in a row last Thursday, reaching the highest level in 14 years, trying to curb the local double-digit inflation rate.

In terms of financial event data last Friday, Markit, a market research institution, announced that the January comprehensive and service industry PMI in the euro zone rose to 50.3 and 50.8 than expected, especially the data of Germany, France and Italy. The UK data also improved, rising to 48.5 and 48.7 respectively than expected, reflecting the improvement in the overall service industry activities in the euro zone countries and the UK.

From the upward direction, the upper pressure (upper resistance) is 0.8950, 0.8990; From the downward direction, the lower support is 0.8910.

0206 banner 4_ Work area

Gold/US dollar (xauusd):

Gold against the U.S. dollar rose sharply last Friday and fell below the thousand nine mark. After that, it closed at around 1864.86. Due to the continued interest rate hike by the three major central banks and the strong non-agricultural data, the gold price fell sharply and hit a new low in three weeks.

In terms of negative factors

1. the non farm employment data of the United States increased significantly in January: the data released by the U.S. Department of labor showed that the non farm employment population of the United States increased by 517000 in January, with an expected increase of 185000 only, and the previous growth rate was revised down from 260000 to 223000; The unemployment rate in the United States recorded 3.4% in January, with the previous value and the expected value of 3.5% and 3.6% respectively; The average hourly wage rate in January in the United States was 4.40%, and the expected and previous values were 4.3% and 4.6%, respectively.

2. the world's three major central banks continue to raise interest rates: last Thursday, the Federal Reserve announced that it would raise the federal funds rate by 25 basis points to a range of 4.5-4.75%, which is in line with market expectations. The Federal Reserve pointed out in its policy statement that it would be appropriate to continue to raise interest rates, and is considering the extent of future interest rate increases. Subsequently, the European Central Bank announced that it would raise the three key interest rates in the euro area by 50 basis points, and reiterated that it would maintain the scale reduction of the balance sheet and continue to maintain the pace of monetary tightening. The Bank of England also raised interest rates by 50 basis points as scheduled, the 10th consecutive increase, reaching the highest level in 14 years, trying to curb the local double-digit inflation rate.

In terms of positive factors

1. US Federal Reserve President Powell released the dove speech: US Federal Reserve Chairman Powell said that we can announce that the deflation process has begun. If inflation drops faster, it is necessary to cut interest rates at the end of 2023, which attracts a large number of dollar bears. Powell said that inflation is still far above the target. Inflation in the past three months has shown a gratifying slowdown, but more evidence is needed to be sure that inflation has cooled. Many indicators show that the US job market is still strong; There is no sign of weakness in the labour market. There is a path that can reduce inflation to 2% without a sharp economic recession; The US economy is still likely to achieve a soft landing. However, Powell admitted that if inflation fell faster, interest rates might be cut this year.

2. the Bank of England and Europe hinted at a dove stance: Although the Bank of England and Europe continued to raise interest rates by 50 basis points last week, it also showed a dove stance, saying that the inflationary pressure in its economy has become more controllable, suggesting that it will suspend tightening. The market readily accepted this. ECB president Lagarde said that growth is expected to remain weak, the unemployment rate may rise and job creation may slow down; High inflation and tight financing conditions have restrained expenditure and production, and bank loans to enterprises have decreased sharply. The supply bottleneck is gradually easing, the natural gas supply is safer, the energy price in December is lower than expected, and the risk of inflation outlook is more balanced. Most inflation expectations are around 2%. In addition, Bailey, governor of the Bank of England, believed that inflation showed signs of turning around, and preliminary signs showed that cost pressure was improving.

Pressing from above (upper resistance) 1864.801866.20; From the downward direction, the lower support is 1862.50.