The Dollar Stays At The Bottom Of The Dollar Smile Form.

At present,

Market sentiment is supported by the dovish stance of the Fed. Of course, the Fed's dovish position is also the main reason for the poor performance of the US dollar.

The "dollar smile form" assumes that the dollar will continue to appreciate, either because the market is to avoid risks, because investors expect the Federal Reserve Chairman Yellen to raise interest rates for a limited time delay or to be boosted by global economic growth and continuous improvement in market sentiment, which, of course, will eventually restore the US Federal Reserve to its tightening cycle.

There is a classic inspirational saying, "life is like a big pot. When you go to the bottom of the pot, if you are willing to work hard, no matter which way it is, it will be upward."

Many analysts believe that the US dollar is currently at the bottom of this market.

We call the "dollar pot bottom" the "dollar smile form", and the market environment is just like this "pot", which means that the dollar is "upward" no matter how the market environment changes.

In the absence of sustained growth in the global economy, the market expects the former to be more likely.

The US dollar is expected to rise again relative to other G10 commodity currencies, as investors begin to question whether the Fed can further postpone raising interest rates, and the sustainability of commodity price increases has also been questioned in the context of the current risk of global economic recovery.

In this market environment, the euro and yen should also be more flexible.

This means that along with

The risk of downside increases even worse. Commodity currencies and the euro and US dollar will fall more than the US dollar. Therefore, the US dollar will appreciate relative to other currencies in the case of global economic recovery.

From the tactical point of view, the US dollar.

Since the trend has already contained many negative factors, the US dollar trend has made a stronger response to the potential unexpected economic data.

Next week, investors should pay close attention to retail sales in the US.

If the data did not disappoint the market, it is expected that the US dollar may continue its cautious recovery trend.

In other respects, the Central Bank of Norway is expected to maintain interest rates unchanged, but it can relax the conditions of interest rate cuts, thereby keeping Norway Krona under pressure.

Next week, Sweden's inflation data may be surprisingly good, so it will add the attractiveness of Swedish kronor again.

Next week's most important economic data should be the European Central Bank's inflation report.

Investors want to know whether the ECB's Monetary Policy Committee sees the latest economic downturn as temporary and whether it is affected or continued by Britain's retreat to Europe, which will also affect the ECB's policy prospects.

With the British referendum approaching, the ECB's monetary policy committee should emphasize its expectation for the prospect of asymmetric risks.

This will also provide more evidence for the UK's increasing risk of European withdrawal, which will also keep the pound under pressure.