Foreign exchange trading reminder: The dollar has stabilized after falling for five consecutive days, so pay attention to PMI data

On Friday (March 24), the dollar index was in a narrow range at the beginning of the Asian market, and is currently trading around 102.65. After falling for five consecutive days, the dollar index bottomed out on Thursday and rallied. Although the Federal Reserve of the United States issued a sound that it was close to stopping interest rate hikes, and the Swiss National Bank and the Bank of England advanced further interest rate hikes, concerns about the banking industry still provided safe-haven support for the dollar.

This trading day will usher in the March PMI data of European and American countries, and investors need to pay attention.

The Federal Reserve raised its benchmark interest rate by 25 basis points on Wednesday, but dropped the language about "continuing to raise interest rates" in favor of "adding more".

The Fed's rate hike is notable because financial marekts have been beset by shaky confidence among global banks following a run on Silicon Valley banks two weeks ago and a sudden thunderstorm at Credit Suisse.

Joe Manimbo, senior market analyst at Convera, said: "If the banking crisis largely subsides and inflation remains stubbornly high, that could be a factor in helping the dollar recover, because maybe the Fed can get back to fighting inflation with all its might and not have to worry about a banking crisis hitting the economy hard."

The dollar index fell as much as 0.6% in intraday trading on Thursday, hitting a new low of nearly a month and a half to around 101.91. It rose 0.05% in late trading to close at 102.61, ushering in its first rising day after five consecutive days of decline.

"It doesn't seem like a lot of people are necessarily fleeing to safety," says Juan Perez, head of trading at Monex US. "It's more like there's a sense that if the banking industry is doing well and is bailed out every time it looks like it's going to be in trouble, then generally it will survive and be fine."

Markets are betting that the Fed will raise rates by just 35 basis points, compared with about 50 basis points in Europe.

The gap sent the euro to a seven-week high of $1.0930 at one point, but it gave up gains in late trading, closing 0.26% lower at 1.0826 against the dollar on Thursday.

"It looks like [the ECB] may now have the most hawkish baton because they seem to have a bigger interest rate hike plan than other central banks at the moment," Mr. Manimbo said.

The Bank of England raised borrowing costs by 25 basis points on Thursday, in line with expectations, and said further tightening was needed if there was evidence of more persistent price pressures.

The pound rose 0.19% against the dollar on Thursday to $1.2284.

The SNB also raised its policy rate by 50 basis points as it sought to strike a balance between tackling inflation and concerns about financial marekting.

The central bank said measures on Credit Suisse announced over the weekend had "stopped the crisis".

The dollar fell against the Swiss franc on Thursday after the rate was decided, falling 0.14% to close at 0.9160 in late trading.

Friday's important economic data and risk events