Following the first quarter's global central bank week, the most crucial monetary policy decision from the US has seen the dollar rebound after an initial decline. This has directly pressured the exchange rates of the Japanese yen, euro, and British pound. Does this signify the continuation of the dollar's strength? What strategies can investors adopt for hedging or investing?

From the perspective of Taiwan's investors, the four major currencies show that the dollar has indeed performed unexpectedly well. Despite the Federal Reserve indicating a high chance of interest rate cuts this year, the dollar index has surpassed the key level of 104, reaching a high not seen in over a month. This performance stems from the latest economic outlook where officials have raised growth and inflation forecasts, fortifying the dollar's exchange rate.

On the Japanese yen front, it has fallen below many experts' predictions. The Bank of Japan's slight rate hike to escape negative interest rates and to end its yield curve control has not supported the yen as expected; instead, it has continued to depreciate. Once it breaches previous lows, it may weaken even further. The reason for this continued decline is simply that the central bank had already given the market news of rate hikes ahead of time, leading to a gradual devaluation after digestion.

Regarding the euro, it has followed an expected downward trajectory as economic performance begins to deteriorate, with rate cuts anticipated to occur soon. Should inflationary pressures also diminish gradually, the eurozone could be the first to initiate rate cuts, expanding the room for the euro's depreciation compared to the US.

As for the British pound, a notable rebound has been observed after the UK's inflation retreated, yet it manages to maintain its technical support levels. This suggests that investors are not particularly pessimistic. To quickly determine the balance of long versus short positions, sudden rate cuts by the Swiss National Bank could confirm whether current support levels present a good buying opportunity.

Is the yen's rate hike signaling the end of bullish potential? While countries like the US and UK are expected to shift towards rate cuts, the yen's continued depreciation post-rate hike raises questions for investors about the potential exhaustion of positive signals. Here, we explore possible trading strategies to share with investors. There’s potential for further interest rate hikes, allowing opportunities for the yen to rise again. Alongside the usual cash or deposits in yen, it’s advisable to consider trading contracts for differences, such as the Japanese yen futures (CME product code: 6J), which offer low costs and high liquidity, making them suitable for short-term traders.

On the other hand, those wishing to short the yen need to confirm whether the current downtrend has ended. As shown in the chart, the recent low has been at 0.66075 after the interest rate hike, making it more favorable for short interests to consider further breaking below this level.

As for commodities, if you believe the economic downturn has passed—especially with the recent strong performance of commodities—investors might want to position themselves early in inflation-related assets. Apart from directly investing in oil or gold, the Australian dollar could also be a worthwhile commodity. Direct buying is one option, but utilizing Australian dollar futures (CME product code: 6A) as a low-cost, highly liquid tool can be a solid approach. Given that commodity exports remain a key growth driver for Australia, if demand recovers or accelerates, the Australian economy could be well-supported.

Current predictions suggest the Reserve Bank of Australia may cut rates in the fourth quarter. Past experience indicates that if the interest rate disparity between Australia and the US narrows (for example, if the US cuts rates first while Australia holds rates steady), the Australian dollar is likely to rise. However, if the opposite occurs and Australia cuts rates first, it could weaken the Australian dollar. Investors looking to bottom fish should particularly take note.

Currently, Taiwanese investors can place orders for futures products offered by the CME with just three simple steps. Step one: open a futures account at firms such as KGI, HuaNan, Fubon, YuanFu, Yongfeng, Yuanta, or Daiwa. Most of these firms handle CME-listed products and offer online account opening services. Prepare the necessary personal documents, so you can complete the setup from home using your mobile phone or computer. Step two: deposit funds into your futures account. After opening your futures account, you can deposit your collateral in TWD. Then, utilize the currency conversion service of the brokerage to easily convert TWD into foreign currency for trading overseas futures. Step three: place your orders through mobile apps or computer software. Additionally, for those unable to constantly monitor the market, it’s wise to set a stop-loss or take-profit price in advance to manage risk.