Title: U.S. Dollar Index Soars After Japanese Disasters: School Analysts Explain
On the first trading day of 2024, the U.S. dollar index experienced a sudden and sharp rise, leaving many in the market puzzled. However, school analysts have offered an explanation that ties the unexpected surge to the recent disasters in Japan.
According to the analysts, the earthquake and plane collision in Japan on January 1st and 2nd have increased market aversion to the Japanese yen, leading to a significant leakage of international liquidity. With the Japanese yen’s hedging functions seemingly compromised by the disasters, the U.S. dollar stepped in to absorb the liquidity, resulting in a sudden rise in the U.S. dollar index.
In addition to the technical rebound, the U.S. dollar actively undertaking liquidity has been identified as the critical reason for the unexpected surge. As a result, the U.S. dollar index experienced a market rise with the purpose of completing the task of recovering liquidity.
Looking ahead, the analysts believe that the U.S. dollar index is likely to maintain a relatively high fluctuation pattern if the situation does not stabilize completely. They suggest that if the situation gradually stabilizes, the U.S. dollar index may begin to cool down.
In light of these developments, the analysts have provided trading strategies for currency pairs such as EUR/USD and AUD/USD, advising traders to consider buying at low prices in the current market environment.
The analysts also noted that while the U.S. dollar index’s volatile upward pattern may create pressure on gold, it is only a short-term behavior and cannot be used as a basis for mid-term judgment. They advise traders to observe the decline of gold and wait for clear opportunities to sell short.
The U.S. dollar index’s unexpected surge, attributed to the aftermath of the disasters in Japan, has prompted analysts to carefully monitor the market and provide strategic guidance to traders based on the evolving situation. As the market continues to react to these events, the analysts urge caution and readiness to adapt trading strategies as needed.