Yellen'S Remarks Raise US Dollar Appreciation Storm

For the world's major central banks, the current problem is that fewer tools are available in the toolbox behind.

In the case of zero interest rates, even negative interest rates and quantitative easing, all of them are already on the stage. What is more simple than hoping for a dollar appreciation?

Until the last one or two weeks, the desire of the global central mama was finally realized. Some of the economic data of the US headed by consumption and inflation began to improve. On Friday, the chairman of the Federal Reserve, Yellen, said that raising interest rates during the year was "appropriate", which again ignited the enthusiasm of the market to make more dollars.

The US dollar index rose 4.2% in the past seven trading days, rising only 1.1 percentage points on Monday.

Columbia Threadneedle fund manager Matthew Cobon said, "many open economies want the dollar to help them do some work. The idea has been shaken by the market, but it is starting to work now."

For example, when the Australian Federal Reserve cut interest rates in February this year, it began again at the beginning of this month.

A record low of 2%, and the Australian Federal Reserve said in the minutes that it is possible to cut interest rates in the future.

To do so, to a certain extent, it can increase domestic inflation and boost exports, but it needs to be risked.

That is to add fuel to the already overheated property market.

Not just Australia, but its neighbor, New Zealand, faces similar problems.

The sharp depreciation of the euro made the countries in the region vulnerable.

Reducing external deficits and promoting growth.

Last year, Germany's current account surplus reached an alarming 8% of GDP, and the external surplus of other core countries also increased.

Since Yellen's remarks last Friday (May 22nd), the dollar has soared against the other major currencies and touched the yen for nearly eight years.

At that time, she claimed that the Federal Reserve would raise interest rates for the first time since 2006.

In contrast, both the BOJ and the ECB are seeking stimulus policies to drive inflation up, while central bankers in Australia and Canada even say they want to lower interest rates to boost the recovery.

"Looking at what Yellen said last weekend, she seems to be determined to take action this year," said Yasuhiro Kaizaki, vice president of global markets at Sumitomo Mitsui Trust Bank Ltd in New York.

Kaizaki added: "until recently, I think people are really buying the US dollar against the euro, but obviously it can buy US dollars against many other currencies."