The dollar index, which fell last night because the PMI was lower than expected, began rising again after less than two hours. The main reason is that inflation in the United States is now expected to have peaked and is trending toward moderation, whereas inflation in the euro area is not falling significantly, and with the Fed getting tough, the dollar index is already beginning to digest the changes that followed its recent rate hike and the expected September rate hike.

It should be slightly noted that the high point of the dollar index was caused after the Euro exchange rate dropped below 1. But at 15:00 yesterday, the Euro exchange rate already dropped below a low for nearly 20 years, and at one point hit 0.99. However, the dollar index has not broken through the high point. Here are the euro interest rate hikes and the impact of the expectations. Therefore, although the Euro exchange rate is seen by many institutions as falling to around 0.95, if inflation in the Eurozone remains high. Therefore, the euro area interest rate increase is likely to contrast with the United States interest rate increase, and even likely to raise interest rates significantly. Therefore, although the dollar index cannot be said to have peaked, but the euro share in the DXY is above 57.6%. If more aggressive interest rate increase strategies are adopted, the euro "value" will also tend to rise, to hedge against the rising dollar, so it is believed that the trend of the dollar index will be somewhat restrained. The reason that you start with all these dollar indexes is that a lot of little buddies have been asking recently whether a rise in the dollar index will cause a fall in the currency market. It doesn't matter, but it does limit the development of the risk market in the medium to long term. The risk market as a part of the risk market is not immune. The rise in the DXY will increase the value of the dollar, and more investors will choose to hold dollar or dollar equivalents.

For example, U.S. Treasury bonds will reduce investment in risk markets, and the reduction in capital will inevitably lead to a lack of purchasing power, which in turn will trigger panic selling. So DXY, while not directly causing a fall in prices, can eventually be applied to risk markets. In terms of the current colonial interest rate of the bond market, the main funds are still concentrated on ultra-short-term U.S. bonds of less than one year, while U.S. bonds of more than one year are seldom used. Short-term U.S. bonds also reflect the current caution of investors on the U.S. economy. From the colonial interest rate, it is obvious that the yield of one-month U.S. bonds is far lower than the exchange rate of the federal funds, which indicates that a lot of funds are concentrated in this range, especially this morning when the yield declined. Three-month Treasury yields are now the same as the federal rate, indicating a significant concentration of money. From the beginning of the six months of U.S. Treasury bonds, the colonial interest rate was far ahead of the federal interest rate. Although the data now show that U.S. Treasury bonds are still purchased in the medium and long term, but the purchasing power is still too low. This shows that investors would rather have a small yield than a long-term but high-yield U.S. Treasury bond. This also shows that investors are not optimistic about the U.S. economy in the medium and long term, and are turning to the short term. It is difficult to say that the change in oil prices is also one of the reasons that complicates the situation. We all know that the drop in the CPI in July was mainly due to the drop in oil prices. Compared to June, the oil price dropped to about 100 US dollars. In August, the oil price dropped to a range of more than 90 US dollars. At one point, it even hovered around 80 US dollars. Especially in anticipation of the danger of a downward US economy, retailers are willing to lower prices even though they have not solved the problem on the supply side. But that has changed again. The economy is still vulnerable, but with the Fed continuing to use non-farm data to argue that there will be no recession, first and foremost oil producers are starting to be optimistic, and are reversing the cuts in purchasing power that they have been forced to make because of concerns about the economy. Second, and more important, the US President's hard-won increase in OPEC's minimum output, in anticipation of Iran's return to the market, has considered cutting output.

It is also unclear whether Iran's oil will flow smoothly into the market, and whether it will curb high oil prices once it does, though Russia, which has been cutting production along with OPEC, has also signaled. But the market reaction was straightforward, erasing not only the economic downturn but also the Opec production increase. Oil prices surged, Brent broke $100 and WTI almost hit 95. 

Fortunately, it is now the end of August, so even if the price of the overall CPI rebound in August will not have a big impact. After all, August has a few days when the oil price is below 90 US dollars, the average can still be controlled at around 90 US dollars. So the CPI expectations for August still maintained a downward trend. Especially with the unlocking of chips, the price of used cars has started to decline, I believe that the price of new cars will also show a downward trend. And all that is above is the effect of macro sentiment, and what is most dampening to macro sentiment is the current expectation that the Federal Reserve will raise interest rates in September. Especially yesterday's rise in US stocks was also caused by the 50 basis points rate increase in September that returned to a 55% probability. Also, the index futures started to rebound after the close of the day before yesterday. When compared to today's situation, the probability of a 50 basis point rate increase in September by the Federal Reserve began to decline after being interpreted by media like Morgan Stanley.

Even the Nasdaq futures have started to show a sustained low since the close of trading last night. When US stocks were not opening, the Nasdaq futures were almost a pointer as to the spot prices of BTC and ETH. Therefore, it is now to be seen whether there will be more aggressive buying after the European time zone. Based on the current trend of Nasdaq futures, if they continue to fall, the Nasdaq low opening will be more likely, and you should be prepared.

The macro-economic influence on the currency market is not only the price, but also the amount of capital changes. When the macro-economic sentiment turns down, the amount of capital in the currency market will show signs of selling, and when the macro-economic situation looks good at the market, the amount of capital will become surplus. So the market value of the stablecoin can also sidestep the current off-market view of the currency market. And judging by USDT's market capitalization as of 8 a.m. this morning, money continues to be flat.

USDC's continued regulatory largesse is back at around $150 million a day, which is being taken over by BUSD. It's even adding tens of millions of dollars to the market value of BUSD, which has topped $19 billion. So for the time being, although the overall amount of money in the currency market is rising by a relatively small margin, it is actually rising. The other is the market value of DAI, although the market value and currency value of DAI will not have a great impact, but can show the current ETH circular arbitrage is the utilization of the leverage of spot, from the current market value of DAI is reducing, also shows that the mortgage of ETH may be gradually reduced, indicating that investors will think the current price of ETH will have a larger amplitude, so choose to release the mortgage to avoid liquidation. This shows that the currency market at present, whether because of the bottom of the speech, or because of the merger of ETH, or because of the World Cup reasons, has the advantage of attracting external funds, but the advantage is too weak, and the part of the new money into the current no obvious signs of fate, has been in the situation of accumulation in exchanges, especially the particularity of BUSD only Binance large use, so it is difficult to give a clear statement. Note, too, that a 75 basis point or 50 basis point increase in September should be the Fed's biggest move without any sign of inflation rising. So if you go with a script like this, September will be a relative bottom, even if it's not a bottom for risk markets. Of course, this assumes that inflation does not continue to rise and that the Fed keeps its year-end federal funds rate below 4%.

Looking at the purchasing power of the BTC and the ETH at present, the overall fund trend is still in a downward position. As of 8:00 this morning, both USDT and USDC have come out of their recent low fund levels. The amount of capital is still in a continuous low stage, which shows that the purchasing sentiment is decreasing, but also means the overall circulation of BTC and ETH are both decreasing, the selling pressure is decreasing and the purchasing power is also decreasing. By comparing the selling pressure between BTC and ETH, it is true that the selling pressure is at a low level recently. The drop of selling pressure shows that the current price has indeed reached the relative bottom, and fewer and fewer holders are willing to sell their chips, which is also because the macro sentiment has not changed. In addition, after a week of decline, investors who are sensitive to prices have already left the market. The remaining holders are more likely to hold their money for longer periods or to be more gambling. According to the exchange data, the amount of BTC withdrawals in the case of purchasing power decreased can not cover the selling pressure, some of the chips or active or passive remain in the exchange, but because the involved chips are still too little, so there is no significant change in the position data from the end of the morning to 8:00.

ETH data can be found, with the price contact to 1,500 US dollars, there is a strong desire to buy and purchasing power, not only covers the overall selling pressure, but also can be reduced from the exchange of some chips, but also because of the low magnitude, did not have a large impact on the high ETH stock, so the risk of ETH high selling pressure has not been removed. Therefore, combining the current trend of selling pressure and purchasing power, we can see that the current price trend is still dominated by fluctuations, even the amplitude of ETH will begin to decrease, and the BTC is more likely to be a narrow fluctuation. In addition, from the current user sentiment of BTC and ETH, although the short is still the main, but it is obviously different. BTC is more rational, the long and short has been changing, will be adjusted according to the price and sentiment of the market, but ETH is different, it seems that ETH will not drop to 500 US dollars undead, a large and sustained large-scale short is still to be rational, especially after adding high leverage.