Last week (April 3-10): The international financial market underwent a dramatic shift! From the previous &#34;risk aversion first,&#34; it switched to a phase of &#34;policy + fundamentals&#34; driven recovery mode. The US dollar continued to decline, the renminbi stabilized and appreciated, and global stock markets collectively rebounded, indicating a clear market warming; however, everyone should also be aware that the repeated geopolitical tensions in the Middle East and the &#34;uncertainty&#34; surrounding the Federal Reserve's interest rate cuts are two pitfalls that have not yet been filled, so do not be overly optimistic!
Today, let's clarify the core logic of the international financial market last week in plain language, break down the risk points, and discuss how ordinary people should respond.
Core highlights of the market last week: In simple terms, it was the &#34;weakening of the US dollar&#34; and the &#34;recovery of risk appetite&#34; working in tandem, which directly determined the rise and fall of various assets. On April 3, the US dollar index was still stable at a high of 100.2, supported by the previous demand for safe-haven assets due to the conflict in the Middle East, as well as expectations that the Federal Reserve would maintain high interest rates; however, just a week later, the dollar &#34;fell off a cliff,&#34; closing at 98.7 on April 10, a drop of over 1.5% for the week, completely reversing the gains since the US-Iran conflict, making it the &#34;biggest variable&#34; of last week.
Why did the US dollar suddenly weaken? There are two reasons behind it:
First, the tension in the Middle East has eased somewhat, eliminating the previous risk premium. Since April, the US and Iran have agreed to a temporary ceasefire, although there have been minor incidents—both Iran and the US made strong statements, Hezbollah was bombed, and Kuwaiti energy facilities were attacked—overall, the situation is moving towards de-escalation, and the shipping risks in the Strait of Hormuz have decreased. Funds that previously flocked to buy US dollars for safety are now withdrawing, dimming the &#34;safe-haven halo&#34; of the dollar.
Second, people are starting to anticipate interest rate cuts from the Federal Reserve, making the dollar's interest rate advantage less appealing. Last week, US economic data was not as good as expected, coupled with falling oil prices, which reduced inflationary pressures, leading the market to speculate that &#34;the Federal Reserve will cut rates this year&#34;; meanwhile, central banks in Japan and Europe are taking a tougher stance, narrowing the interest rate differential between the dollar and other currencies, causing funds to flee from dollar assets—how can the dollar not fall?
Key point! Although the current market is recovering, do not be blindly optimistic; two core risks could disrupt the rhythm at any time, affecting both market institutions and ordinary people. Specifically, consider these two points:
First, the repeated geopolitical situation in the Middle East: The US-Iran ceasefire is temporary, and there are often ups and downs; it is possible that tensions could flare up again at any time. As of the time of writing, the US and Iran concluded 21 hours of negotiations in Islamabad but did not reach an agreement. If hostilities resume, oil prices could surge again, leading to higher domestic fuel prices, making driving and shopping more expensive; at the same time, people will flock to buy US dollars for safety, causing the dollar to rise and putting pressure on the renminbi, disrupting the previous market recovery.
Second, the uncertain expectations for Federal Reserve interest rate cuts: The market is currently anticipating interest rate cuts from the Federal Reserve, but there are significant internal divisions within the Fed, and no one can determine exactly when or how many times rates will be cut. If the rate cuts ultimately fall through or inflation rebounds, the dollar could suddenly strengthen, and funds would flow back into dollar assets, impacting the prices of stocks, gold, and other assets;
The financial products, stocks, and currency exchange costs that ordinary people buy will fluctuate, and if not handled properly, it could lead to losses.
In light of these two risks, here are 4 simple and practical methods for ordinary people to consider in order to mitigate risks and reduce losses:
1. Don't buy financial products randomly; diversification is key: Avoid following trends and chasing after rising assets (like the currently strong RMB or the rebounding stock market), and don't put all your money into one type of asset. Consider allocating some funds to low-risk financial products, a small amount of gold (which can hedge risks), limit foreign exchange financial products and oil-related products, and diversify across several asset types. Even if one type incurs losses, others can compensate.
2. Keep an eye on two signals; don’t be a “hands-off manager”: Pay attention to the ceasefire and negotiations between the U.S. and Iran, the U.S. inflation data, and what Federal Reserve officials are saying. Anticipate whether there will be further conflicts in the Middle East or if interest rate cuts will be off the table. Don’t wait until news breaks to react; by then, it may be too late, and your assets could shrink.
3. Don’t be impulsive with consumption and currency exchange; finding the right rhythm saves money: If you have needs for overseas shopping, studying abroad, or traveling, don’t exchange all your dollars at once. Exchange in batches to avoid the times when the dollar rises and the RMB falls, which can save you a lot of money. During fluctuations in oil prices, drive less and plan your trips wisely to avoid unnecessary fuel expenses.
4. Don’t be greedy for quick gains or speculate; stability is key: Avoid the temptation to make quick money in the short term by following trends to buy the dip in oil or chasing after soaring assets, as it can easily lead to pitfalls. Prioritize stable assets, avoid blindly chasing highs and lows, and protecting your principal is more important than anything else.
Core Indicator Changes in the International Financial Market
(April 3 - April 10)
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Proofread by Wang Zunjun and Zhang Ruonan
Layout edited by Bi Dandan and Sun Xiao

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Last week, the international financial market experienced significant changes, shifting from a risk-averse priority to a policy and fundamentals-driven recovery model. The U.S. Dollar Index fell by more than 1.5%, closing at 98.7, mainly influenced by the easing of tensions in the Middle East and market expectations for a Federal Reserve interest rate cut. Although the market has warmed up, caution is needed regarding geopolitical risks in the Middle East and uncertainties in Federal Reserve policy, which may affect market trends

Repair established, risks remain | International Financial Observation (4.12)