Core Viewpoint - The future trend of the US dollar index is likely to be a downward fluctuation, which may lead to a stable or rising trend in the RMB to USD exchange rate, benefiting China's cross-border capital flow and the internationalization of the RMB [2][11]. Group 1: Historical Analysis of the US Dollar Index - Since 1971, the US dollar index has experienced three long cycles of decline followed by rise, with significant percentage changes in each cycle [2][5]. - The first cycle saw a decline from 120.5 to 82.1 (31.9% drop) and a rise to 164.7 (100.6% increase) [2]. - The second cycle had a decline from 164.7 to 78.3 (52.5% drop) and a rise to 120.9 (54.4% increase) [2]. - The third cycle experienced a decline from 120.9 to 71.3 (41.0% drop) and a rise to 114.1 (60.0% increase) [2]. Group 2: Current Dollar Index Trends - From September 2022 to June 2025, the dollar index is projected to decline from 114.1 to 96.9, a decrease of 15.1% [4]. - The end of the previous Federal Reserve interest rate hike cycle and the beginning of a rate cut cycle in September 2024 suggest a new long-term downward trend for the dollar index [4]. Group 3: Characteristics of Dollar Index Cycles - The highest and lowest points of the dollar index in the three cycles show a gradual downward trend, indicating a weakening of the US economic advantage relative to other developed countries [5]. - The duration of the cycles has been increasing, with the downward phases lasting around 7-8 years and the upward phases extending significantly [5]. - The relationship between the dollar index and interest rates has changed, with recent trends showing a lower correlation between the two [6]. Group 4: Future Predictions for the Dollar Index - The dollar index is expected to continue a downward trend for an extended period, potentially lasting another 6-7 years [10]. - The lowest point of the current downward cycle may fall below the previous cycle's low of 71.3, but it is unlikely to drop below 80 due to issues in other developed economies [10]. - The correlation between the dollar index and US interest rates may remain low, impacting the RMB to USD exchange rate positively [11].

Group 1 - The U.S. is facing significant debt pressure, and the trade war with China has escalated unexpectedly for Trump [2][4] - Trump has been vocal in his criticism of Federal Reserve Chairman Powell, demanding interest rate cuts to support the economy, but Powell has maintained the Fed's independence [6][8] - High interest rates are causing distress in the U.S. manufacturing sector, with average loan rates exceeding 6%, impacting companies like Tesla and Walmart [10][12] Group 2 - Trump's trade policies aim to reduce trade deficits and revive U.S. manufacturing, but high loan rates hinder companies from relocating to the U.S. [12][14] - A significant amount of U.S. debt, totaling $6.5 trillion, is maturing soon, leading to concerns about the government's ability to meet these obligations [14] - China has refused to negotiate with the U.S. in response to Trump's tariffs, contrasting with previous negotiations during his first term [16][18] Group 3 - Trump has attempted to signal goodwill towards China by suggesting potential tariff reductions, despite no communication from China [20][22] - The situation in Taiwan is being leveraged by Trump, as he may be influencing Taiwan's leadership to adopt a more conciliatory stance towards China [27][28] - The dynamics between the U.S. and Taiwan are shifting, with calls for peace contrasting with previous aggressive rhetoric [25][30]