Core Insights - The narrative of "dollar hegemony weakening" is prevalent, with claims that the dollar's global reserve share has dropped to 42.8% and the euro has risen to 32.5%, but these figures are misleading and do not align with official data from the IMF [1][3] Group 1: Dollar and Euro Positioning - The dollar's reserve share is reported at 56.3% as of Q2 2025, marking a 30-year low but still significantly higher than the euro and yuan combined [3][4] - The dollar's decline is attributed to the Federal Reserve's interest rate cuts and concerns over U.S. debt levels, leading to a reduction in dollar-denominated assets held by other central banks [3][4] - The euro remains stable at around 20.2% of global reserves, supported by the European Central Bank's credibility and the economic size of the Eurozone, but faces challenges such as slow economic growth and policy unification [3][4] Group 2: Renminbi's Progress - The renminbi's global reserve share has increased to 2.12% (approximately $246.3 billion) as of Q1 2025, having doubled over recent years, with expectations of reaching 6% by 2030 according to central bank surveys [4][6] - Cross-border usage of the renminbi is growing, with a 21.1% year-on-year increase in cross-border transactions, and 26.5% of trade settlements now conducted in renminbi [4][5] - The renminbi's international payment system (CIPS) processed 175.49 trillion yuan in 2024, reflecting a 42.6% increase, indicating a broader acceptance of renminbi in global trade [5][6] Group 3: Future Prospects and Challenges for Renminbi - The renminbi's potential for growth is supported by China's solid economic fundamentals, with a projected GDP growth of 5% in 2024, and ongoing internationalization efforts by the People's Bank of China [6][7] - However, significant challenges remain, including a large gap in reserve share compared to the euro and dollar, capital flow restrictions, and insufficient market depth for renminbi-denominated assets [8][9][10] - The global currency landscape is evolving gradually, with the dollar transitioning from an absolute leader to a relative one, while the renminbi is positioned as a promising contender for future growth [10]

Group 1 - The foreign exchange market is entering a data-intensive period, with the U.S. Consumer Price Index (CPI) data being a key focus that will influence market expectations regarding the Federal Reserve's policy direction [1] - If inflation data continues to show signs of cooling, it may strengthen market expectations for a rate cut in September, putting additional pressure on the U.S. dollar [1] - In Europe, speeches from European Central Bank officials and economic data releases from the Eurozone will be important indicators for the euro's performance [1] Group 2 - The ongoing weakness of the U.S. dollar provides emerging market currencies with a rare opportunity for recovery, particularly for those with strong fundamentals [2] - The combination of the dollar's historical weakness, easing geopolitical risks, and a return of market risk appetite is reshaping the global currency landscape [2] - Investors are advised to closely monitor changes in Federal Reserve policy expectations, developments in geopolitical situations, and the divergence in economic fundamentals across countries [2]

Core Viewpoint - The European Central Bank (ECB) President Christine Lagarde highlighted that the Eurozone is facing a historic strategic window due to structural pressures on the US dollar system, which includes increased political polarization in the US, frequent adjustments in the Federal Reserve's monetary policy framework, and a global trust crisis stemming from geopolitical strategic contraction [3]. Group 1: Eurozone's Strategic Position - Lagarde emphasized the need for the Eurozone to leverage its institutional advantages, such as the ECB's transparent policy transmission mechanism, a robust financial regulatory framework developed through the subprime crisis, and the stability of the EU legal system, to reshape the Euro's strategic position in the international monetary system [3]. - The current capital flow dynamics are influenced by the ambiguity of the Federal Reserve's policy path and the political uncertainties surrounding the upcoming US elections, particularly the potential return of Trump, which is prompting global investors to reassess the long-term risk premium of dollar assets [3]. Group 2: Structural Reforms in the Eurozone - Two significant structural reforms are being advanced in the Eurozone: the deepening of the Capital Markets Union to facilitate cross-border investment and financing, and the innovation of common debt instruments aimed at creating a regional risk-hedging mechanism [3]. - These initiatives are expected to fundamentally enhance the Euro's status as a safe-haven currency, providing a scarce strategic resource of certainty in increasingly volatile global markets [3]. Group 3: Technical Analysis of Euro to USD - The technical analysis indicates that the Euro to USD exchange rate is exhibiting clear range characteristics, with resistance levels concentrated around 1.1330-1.1335, and support levels at 1.1270-1.1275 and 1.1245-1.1250 [4]. - A trading strategy could involve positioning for a short near 1.1335, with a stop-loss set 40 points above the breakout, targeting the lower end of the range [4].