CICC: It remains to be seen whether the USD exchange rate will continue to significantly decline in the medium to long term.

A report by Golden Research Institute stated that since the beginning of the year, market concerns about US debt and inflation have intensified. The internal contradictions in the United States, as well as some non-economic words and actions of the Trump administration, have further led the market to believe that both the hard power and soft power of the United States are declining, causing damage to the international status of the US dollar, and a "three kill" situation in stocks, bonds, and foreign exchange, leading to the depreciation of the US dollar. In the short term, because the net supply of US bonds in the third quarter is expected to increase significantly, the US dollar may still have downside potential. In the medium to long term, it is a consensus in the market that confidence in the US dollar is weakening, but there has not yet been a major event in the international monetary system to test how much the market has lost confidence in the US dollar, and whether the US dollar exchange rate will continue to decline significantly. According to Keynesianism, market expectations will amplify the impact of various factors, and the fluctuations of expectations themselves are quite large. The US dollar trading index has a high weight on the euro. If the US dollar still has room for depreciation in the third quarter, then correspondingly, the euro still has room for appreciation in the short term. However, the recent appreciation of the euro reflects the power of market expectations, and its fundamentals have not undergone significant changes. In the medium to long term, the marginal elevation of the euro's status, but the Eurozone's development still faces various challenges, such as high debt ratios, insufficient innovation, market segmentation, and high energy costs.