Australian exchange foreign exchange trading alert: the US dollar hit the longest consecutive rise in 15 months, alert to the risk of a short-term correction

Last Friday, the dollar index closed close to flat again, closing at 103.43. It recorded a cross star for two consecutive trading days, indicating strong resistance above. Investors need to beware of the risk of a short-term pullback in the dollar index and pay attention to the support near the 200-day moving average of 103.19. However, the dollar index still recorded a weekly gain of 0.56%, a five-week rise, setting a record for the longest streak of gains in 15 months, as recent worries about the economies of Asian giants and bets that US interest rates will remain high have fueled demand for safer assets.

Monday (September 21) Asian session, the dollar index narrowly oscillated, currently trading around 103.42, last Friday the dollar index again close to flat, closing at 103.43, for two consecutive trading days recorded the cross star, suggesting strong resistance above, investors need to beware of the dollar index short-term correction risk, pay attention to the 200-day moving average near 103.19 support. However, the dollar index still recorded a weekly gain of 0.56%, for five consecutive weeks of gains, setting a record for the longest streak of gains in 15 months, as the recent worries about the economy of Asian powers and bets that US interest rates will remain high fueled demand for safer assets."The dollar continues to rally as the U.S. economy is performing much better than expected, which is pushing back the timeframe for a possible easing by the Federal Reserve," said Joe Manimbo, a senior market analyst at Convera.

Minutes from the Fed's last meeting this week showed that most members of the rate-setting committee continued to see "significant upside risks to inflation", with strong economic data last week, particularly on retail sales, also providing support for further tightening.

The dollar also received a boost as investors appeared concerned that big Asian governments were not doing enough to support their economies.

The depreciation of the yen has made traders wary of the risk of intervention by Japanese authorities.USD/JPYLast Friday, it fell 0.32% to close at 145.37, marking two consecutive sessions of losses. Risk aversion also provided some support to the yen. Last Thursday, the dollar hit a nine-month high of 146.56 against the yen.

"Traditionally or historically there has been a trend for the yen to appreciate when things get worse in the big Asian countries, which will strengthen the yen, but that's not the case this time," Trevisani said.

Last autumn, the dollar soared above 145 yen, triggering the first intervention by Japanese authorities in decades to buy yen.

The decline in commodity currencies slowed last Friday.The Australian dollar and the New Zealand dollar both closed close to flat, closing at 0.6403 and 0.5921 respectively, with weekly losses of 1.4% and 1.04% respectively, both falling for five consecutive weeks. However, after continuing to decline, the short-term downward momentum has weakened, and it is necessary to be vigilant against the possibility of a short-term rebound adjustment.

Among other currencies, the pound and the euro also came close to closing on Friday.GBP/USDThe market closed at 1.2740, up 0.29% last week, after British retailers reported a larger-than-expected drop in July sales, and last week's UK wage growth was also stronger than market expectations, raising expectations of further interest rate hikes by the Bank of England.

EUR/USDLast week, it fell by 0.69%, marking the fifth consecutive week of decline. Last Friday, it bottomed out and rebounded, closing close to flat at 1.0871. It is expected that some rebound opportunities will be ushered in in the short term. Focus on the resistance near the 100-day moving average of 1.0929.

Monday Forward

There are few economic data and risk events this trading day.

09:15 China's August one-year loan market quotation rate, China's August five-year loan market quotation rate

institutional perspective

Bank of America warns US $1 trillion high-yield corporate debt faces "day of reckoning"

Bank of America has warned that a large amount of high-yield bonds accumulated by U.S. companies could be at risk. The bank estimates that companies have accumulated about $1 trillion in high-yield bonds over the past five years, most of which were generated by companies below investment grade. About 25 percent of this is made up of high-risk high-yield bonds issued by companies below investment grade, 35 percent is made up of syndicated loans from companies below investment grade, and the remaining 40 percent is classified as private debt. In addition, about half of this debt is at risk of potential default, which could spell trouble for the market. "The new $1 trillion of leveraged credit added over the past five years faces a day of reckoning," Bank of America strategist Yuri Seliger said in a note Friday. He then added: "About half of these funds are currently well-performing capital structures, while the other half are in various stages of stress."

Bank of America strategist: US stocks could fall another 4%

US stocks recovered from intraday lows on Friday, but both the Nasdaq and the S & P 500 are set for a three-week losing streak. Bank of America strategist Michael Hartnett said US stocks could lose another 4 per cent due to soaring yields and other risks. The CBOE put/call ratio surged above 1 on Wednesday, a sign that investors are stepping up their protection as they expect more volatility in individual stocks. If stocks cannot hold at current levels, that would be "a bad sign".

Bank of America: As the U.S. economy recovers, the dollar is expected to remain strong

Bank of America analysts Athanasios Vamvakidis and Claudio Piron said in a note that the dollar will strengthen as the market adjusts to the reality that "the U.S. economy is resilient and core inflation remains high." A soft landing for the U.S. economy compared to the euro zone will support the dollar. Vamvakidis and Piron believe that the market is betting too much and too early on a rate cut. They expect the dollar to continue to strengthen and the Federal Reserve to continue to emphasize the message of "holding interest rates at higher levels for longer".

Citi: Expect a more limited retraction of the pound

Sterling slipped as UK retail sales missed expectations, revising hawkish expectations of short-term UK interest rates, according to Citi. However, the pound remained the best performer among G10 currencies this week due to a sharp repricing in interest rate markets. UK inflation data, relative to other regions, suggest the Bank of England is still likely to raise interest rates, meaning a pullback in sterling will be limited. A calmer gilt market should remove headwinds from global interest rate markets.

Scotiabank: Weak risk appetite is good for the dollar

Scotiabank said the dollar has maintained a solid floor after six consecutive trading days of gains and two consecutive trading days of closing above its 200-day moving average. However, the dollar's intraday range of volatility has so far remained within yesterday's trading range, suggesting some consolidation in the dollar's overall bull market. Risk appetite was weaker on Friday, with investors concerned that high interest rates could weigh on stock market returns. Weak risk appetite is positive for the dollar. Yields are falling in all major bond markets, but the decline in U.S. Treasury yields (about 5 basis points) is smaller than in European markets (7-10 basis points), which is partly positive for the dollar and actually adds support for the greenback.

ABN Amro: EUR/USD is likely to continue trading in a narrow range for now

Economists at ING said the euro and other procyclical currencies appeared to have a way to weather the slowdown without much impact, but that meant a sharp rally against the dollar would be delayed. The euro is likely to continue trading in a narrow range against the dollar for now, with a slightly bearish bias, and could fall back to the 1.0850 level.