On August 15th, the US dollar captured significant attention in foreign exchange markets. The dollar index experienced an initial decline followed by a sharp recovery, touching a two-week low during morning trading before staging a robust afternoon rally driven by stronger-than-expected US Producer Price Index (PPI) data. The index ultimately closed 0.4% higher at 98.22, reaching recent highs.

Recent dollar volatility has been primarily driven by US economic data releases and Federal Reserve monetary policy expectations. While markets had previously anticipated a potential 50 basis point rate cut by the Fed in September, the surprisingly strong PPI data significantly cooled these expectations. Federal funds futures now indicate a 93% probability of a 25 basis point cut in September. This shift in expectations propelled the dollar's rebound, aided by the currency's oversold conditions that warranted a technical bounce. Looking ahead to the second half of the year, weakening economic growth momentum and significant Fed policy divergence suggest the dollar will likely depreciate, trading within a 92-100 range. Long-term challenges include mounting debt concerns and other structural issues.

Thursday's currency market closed with the dollar index at 98.21, gaining 0.43%; EUR/USD settled at 1.1648, declining 0.49%; USD/JPY finished at 147.7495, up 0.25%; and USD/CNY closed at 7.1823, advancing 0.01%.

**Basic Analysis of the Foreign Exchange Market**

Several factors are influencing foreign exchange markets:

1. **Economic Data**: US initial jobless claims for the week ending August 9th came in at 224,000, below the expected 228,000 and previous 226,000. July PPI annual rate reached 3.3%, exceeding expectations of 2.5% and the previous 2.3%. July PPI monthly rate surged 0.9%, well above the expected 0.2% and previous 0%. Yesterday's notably strong US data created positive momentum for the dollar while pressuring gold, forex, and crude oil markets.

2. **European Monetary Policy**: Markets are beginning to expect eurozone interest rates to remain elevated for an extended period, particularly following recent US-EU trade agreements that have significantly reduced investor concerns about tariff-induced deflation. This development lowers the probability of further eurozone rate cuts. Wall Street investment banks believe that despite ongoing US-European trade uncertainties and risks, the European Central Bank's relatively optimistic assessment of the eurozone economy in its latest meeting may signal rates will remain around the 2% level going forward.

3. **Geopolitical Developments**: On the 14th, President Trump provided additional details regarding his upcoming meeting with Russian President Putin in a Fox News interview. Trump expressed confidence that Putin would reach an agreement and estimated only a 25% risk of meeting failure. He indicated that the August 15th meeting with Putin would lay groundwork for a second summit, threatening sanctions if issues remain unresolved.

4. **Digital Infrastructure**: At Thursday's State Council Information Office press conference, National Data Administration officials reported that China's internet user base has reached 1.123 billion people, with internet penetration at 79.7%. Accessible, affordable, and quality digital services are benefiting more citizens. During the 14th Five-Year Plan period, national internet hospitals served over 100 million people annually, national medical insurance code users exceeded 1.2 billion, and cross-provincial medical reimbursement services benefited 560 million people.

Overall assessment indicates the dollar index has found support and resumed upward momentum, with USD continuing oscillating recovery patterns while non-dollar currencies face renewed pressure. The dollar's broad-based strength coincides with data showing US July producer prices rose more than expected due to sharp increases in services and goods prices, suggesting widespread inflation acceleration in coming months. Traders are increasing bets on Fed rate cuts in upcoming months. For short-term intraday trading, non-dollar currencies may continue advancing while the dollar index could face sustained pressure. From a longer-term cycle perspective, dollar exchange rate movements are being adjusted toward a bottoming-out recovery pattern, supporting medium to long-term bullish sentiment.

**Technical Analysis of the Foreign Exchange Market**

**Dollar Index** The dollar index climbed from a low of 100.15 to a secondary peak at 110.18 before resuming downward pressure. Current price action has broken below and is trading beneath the MA250, falling through the 100 psychological level and displaying clear bearish trends. Intraday short-term action suggests continued bearish oscillating decline patterns.

**EUR/USD** EUR/USD declined from previous highs of 1.1214 to new lows at 1.0177 before beginning a base-building recovery. Currently, EUR/USD is trading entirely above the MA250 daily moving average, showing clear bullish trends. Intraday short-term action suggests bullish oscillating rebound patterns.

**USD/CNY** USD/CNY offshore rates have experienced multiple oscillating periods, resuming upward movement from previous lows at 6.9651. Currently breaking above and trading above the MA250 moving average, prices created new highs at 7.4287 on April 8th before showing clear downward pressure. Intraday short-term action suggests bearish oscillating decline patterns.

**USD/JPY** USD/JPY declined from highs of 161.9525 to 139.5795 before launching a secondary rebound. After retesting secondary highs at 158.8763, the pair resumed downward pressure. Current price action is trading below the MA250 moving average, maintaining consistent declining trends short-term. Intraday short-term action suggests bearish oscillating decline patterns.

**Risk Disclaimer**: The above data is for reference only. Past performance does not predict future results. Investment carries risks, and market entry requires caution.