Characteristics of major currency transactions:
dollar
The United States has the highest economic strength and the highest GDP in the world. 90% of currency pairs in foreign exchange transactions have US dollars. All emerging market currencies are pegged to the US dollar and are very sensitive to changes in the US stock market and bond market. Therefore, it is very important to consider the attitude of the United States towards the US dollar exchange rate from the perspective of its own interests.
For example, in the "Plaza Accord" of 1985, at that time, the United States faced a record huge trade deficit caused by the excessive exchange rate of the US dollar, while Japanese investment held a large amount of US dollar assets. 1In September 1985, the United States put pressure on Germany, France and Britain to reach an agreement on joint market intervention on the same day. Countries sold dollars, causing the dollar to fall to solve the huge trade deficit of the United States. In the end, the dollar continued to depreciate sharply, and the dollar depreciated by 50% against the yen in less than three years. Japanese investors holding dollar assets suffered heavy losses, and the sharp rise of the yen exchange rate eventually pushed the Japanese economy into recession for more than ten years, and Japan failed to challenge the hegemonic position of the United States in the world economy.
In addition, after 10 in 2004, the dollar fell sharply, and the euro hit a record high of 1.3670. In the meantime, the European side has repeatedly called on the United States to intervene in the exchange rate to prevent the economic growth of the euro zone from being frustrated by the high exchange rate of the euro. The United States only verbally expressed its adherence to a strong dollar policy, but was unwilling to jointly intervene in the market, because the depreciation of the dollar would help the United States ease its trade deficit. As a result, the market added more confidence in shorting the dollar, and the dollar plunged all the way before the end of the year. From the above two examples, we can see how important it is for investors to understand the real intention of the United States on the exchange rate trend.
The domestic financial capital market in the United States is developed, which is closely related to the markets all over the world, and the domestic market is also closely related. Because funds can flow between the foreign exchange market, the stock market and the bond market at any time for the purpose of profit-seeking, and they can also flow from home to abroad at any time, the impact of this capital flow on the foreign exchange market is self-evident. For example, the rise and fall of the yield of US Treasury bonds has a great influence on the exchange rate of the US dollar, especially when the foreign exchange market focuses on the prospect of US interest rates. Because the national debt is sensitive to the change of interest rate, investors' expected change of interest rate prospect has a keen reflection in the bond market. When the yield of government bonds rises, it will attract capital inflows and support the rise of exchange rate, and vice versa. Therefore, investors can judge the market's expectation of interest rate prospect from the rise and fall of the yield of government bonds, so as to make foreign exchange investment decisions.
euro
The euro accounts for 57.6% of the US dollar index, with the largest proportion. Therefore, the euro can basically be regarded as the rival currency of the US dollar, and investors can refer to the euro to judge the strength of the US dollar. The proportion of the euro is also reflected in its currency characteristics and trends. The euro is the most stable currency among the major non-American currencies because of its large ratio and large trading volume. Like large-cap stocks in the stock market, it often drives European currencies and other non-American currencies and plays a leading role. Therefore, for beginners, it is quite advantageous to choose the euro as the main operating currency.
At the same time, because the euro has only been listed for a few years, its historical trend is quite in line with technical analysis, and it is stable, with large trading volume, not easy to be manipulated and few human factors. Therefore, it is more effective to grasp its long-term trend only from the perspective of technical analysis. Except for some special market conditions and trading hours, such as the end of 2004, the euro broke through to a record high in the festive atmosphere and light trading on Christmas and New Year's Day. The follow-up market shows that this is a false breakthrough and a cunning means of shipping in some major markets. Generally speaking, the reliability of important points, trend lines and morphological breakthroughs is relatively strong.
Both the government and the central bank of a country will intervene in the currency according to their own interests and intentions, and the difference lies in their different abilities. The United States mentioned above, because of its national strength and influence, as well as its political structure, has a strong ability to intervene in the currency. It can be said that, basically, the long-term trend of the dollar can be in accordance with the intention of the United States, while the political structure of the euro zone is relatively scattered, with many differences in interests and opinions. Therefore, the EU's ability to influence the exchange rate of the euro has also been greatly reduced, and it cannot be compared with the United States at all. There is no doubt that the United States has the upper hand when Europe and the United States play a game on exchange rates because of differences in interests. As mentioned earlier, in the process of the euro's rise in 2004, the EU's verbal intervention can only have an impact on the short-term trend of the euro. There is no actual intervention in the market because the European side understands that without the cooperation of the United States, the effect is not ideal.
AUD
Australian dollar is a typical commodity currency. The characteristics of commodity currency mainly include high interest rate, high proportion of exports in the gross national product, major producers and exporters of an important primary product, and currency exchange rate changing in the same direction as a commodity (or gold price). Australia has an absolute advantage in the international trade of industrial products such as coal, iron ore, copper, aluminum and wool, so the rise in the prices of these commodities has a great positive impact on the Australian dollar. In addition, although, for example, in recent years, the international commodity futures price index representing the prices of major commodities in the world has been climbing all the way, especially in 2004, the prices of gold and oil rose sharply, pushing up the exchange rate of the Australian dollar.
In addition, the Australian dollar is a high-interest currency, and the changes in the interest rate outlook of the United States and the yield of government bonds reflecting the interest rate outlook have a great influence on it.
pound
The pound was once the world currency, but now it is the most valuable currency. Because of its high exchange rate against the US dollar, it fluctuates greatly every day, especially the transaction volume is far less than that of the euro, so its currency characteristics are characterized by strong volatility. As the earliest foreign exchange trading center in London, the skills and experience of its traders are top-notch, and these trading skills are well reflected in the trend of the pound. Therefore, compared with the euro, the pound is more of a human factor. Therefore, the short-term operation of the pound is the touchstone to test investors' skills, and those investors who lack experience and skills had better stay away from the pound.
The pound belongs to the European currency and is closely linked to the euro. Because Britain is closely related to the economy and politics of the euro zone, and Britain is one of the important members of the European Union. Therefore, the economic and political changes in the European Union have a great influence on the pound. For example, France and the Netherlands voted against the adoption of the EU constitution, which triggered political turmoil, and the euro plummeted, dragging down the pound.
In addition, Britain discovered North Sea oil and became one of the few countries in the Group of Seven that can be self-sufficient in oil. The rise in oil prices is also good for the pound to some extent, and the cross between the pound and the yen has a better performance than the yen.
yen
Because of Japan's small domestic market and export-oriented economy, especially the economic recession in the past decade, export has become a lifeline for domestic economic growth. Therefore, it is Japan's usual foreign exchange policy to intervene in the foreign exchange market regularly so that the yen exchange rate will not be too strong and maintain the competitiveness of export products. The Bank of Japan is the central bank that intervenes in the exchange rate most frequently in the world. Japan has huge foreign exchange reserves and has a strong ability to intervene in the foreign exchange market. Therefore, it is of course necessary for foreign exchange investors to pay attention to the Bank of Japan. Japan's intervention in the foreign exchange market is mainly verbal intervention and direct entry into the market. Therefore, the frequent remarks of officials of the Bank of Japan and the Ministry of Finance have a great influence on the short-term fluctuation of the yen, which is the focus of short-term investors and the difficulty of short-term operation of the yen.
It is precisely because the Japanese economy is closely linked with the world economy, especially with major trading partners, such as the United States, China and Southeast Asia. Therefore, the yen exchange rate is also more susceptible to external factors. For example, China's economic growth is becoming more and more important to the Japanese economic recovery, so the news of China's economic slowdown has a growing negative impact on the yen exchange rate.
Although Japan is an economic power, it is a political puppet. It can be said that it is a small buddy of the United States, and only the United States is the leader. Therefore, from the perspective of exchange rate policy, it basically needs to meet the wishes and interests of the United States. For example, the "Plaza Agreement" of 1985 is the result of political weakness and being controlled by others. Therefore, the intervention in the exchange rate mentioned above can only be tossed within the framework of American "restrictions".
The rise in oil prices is not good for the yen. Although Japan's dependence on oil is decreasing, it remains the same psychologically.
Canadian Dollar
Canadian dollar is also a commodity currency, which is the most dependent on exports among the seven western countries. Its exports account for 40% of its GDP, and its export products are mainly agricultural products and seafood. At the same time, the Canadian dollar is a typical dollar group currency (the dollar group refers to countries with very close economic relations with the United States, mainly including countries that have implemented free trade zones or signed free trade agreements with the United States, with Canada, Latin American countries and Australia as the main representatives), and 80% of its exports are from the United States, which is highly dependent on the American economy.
In terms of exchange rate, the trend of Canadian dollar against major currencies is basically the same as that of US dollar against major currencies. For example, the euro against the Canadian dollar and the euro against the US dollar maintain a good isotropy in graphics, and this relationship has only gradually weakened in the general decline of the US dollar in recent years.
In addition, Canada is the only oil exporter among the seven western countries, so the rise in oil prices is a big plus for the Canadian dollar, making it perform well in the cross-market against the Japanese yen.
NZD
New Zealand was a British colony from 65438 to 0840, and finally declared its independence. Its founding history is no more than 200 years. This country in the South Pacific covers an area of about 270,000 square kilometers and has a population of about 3.66 million. With favorable natural environment, suitable climate, developed agriculture, abundant resources and stable political situation, New Zealand enjoys the reputation of a paradise in the South Pacific.
In the past two decades, New Zealand has successfully transformed from an agricultural economy country to an internationally competitive industrial economy country. The country's economy is still dominated by exports of agriculture, animal husbandry and tourism, while exports of goods and services account for 30% of the gross national product. The New Zealand dollar is a high interest rate currency like the Australian dollar. The Central Bank of New Zealand is the reserve bank of new zealand, established at 1934. 1936 returned to reserve bank of new zealand to independently formulate monetary policy and issue a monetary policy report every six months.
swiss franc
Switzerland is a traditional neutral country, and the Swiss franc is also a traditional safe haven currency. Political turmoil can attract safe-haven capital inflows. In addition, the Swiss Constitution once stipulated that each Swiss franc must be supported by 40% gold reserves. Although this provision has expired, the Swiss franc still has a certain psychological connection with the price of gold. The rise of gold price can drive the rise of Swiss franc to some extent.
Switzerland is a small country, so the exchange rate of the Swiss franc is determined by more external factors, mainly the exchange rate of the US dollar. In addition, because it is also a European currency, it usually follows the trend of the euro.
Swiss franc is a small currency, which can quickly push up the exchange rate and easily overestimate its value in special times, especially when political turmoil leads to a large demand for it.