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A collection of positive and negative news that affects the foreign exchange market
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Hello everyone, today XM Foreign Exchange will bring you "【XM Foreign Exchange Market www.xm-forex.comment】: Collection of positive and negative news that affects the foreign exchange market". Hope it will be helpful to you! The original content is as follows:
Earing May 1, 2025, the foreign exchange market was affected by the interweaving of various factors, and long and short news frequently emerged, bringing a www.xm-forex.complex market environment to investors.
Dollar related news
Nearly factors
Policy uncertainty shock: Since the Trump administration's "reciprocal tariff" policy was launched in April, it once caused a "three-kill" in US stocks, bonds and foreign exchanges. Despite subsequent tax exemptions and easing attitude towards China, policy uncertainty is still impacting the market. Trump's tariff policy has been frequently adjusted, making it difficult for investors to form stable expectations for the US economic outlook and the trend of the US dollar, which reduces the attractiveness of the US dollar. For example, Gary, former director of the National Economic www.xm-forex.commission of the White House? Cohen said that tariff policies will allow American consumers to feel a painful effect in a few weeks, and small businesses and low-income groups will be hit harder, which undoubtedly casts a shadow on the US economic recovery and indirectly negative for the US dollar.
Economic data diverges from expectations: Poll results released by US media show that most people are dissatisfied with the current U.S. economic situation and are worried about the prospect of a recession. The consumer confidence index has also declined recently, reflecting the insufficient domestic consumption momentum in the United States. As an important driving force for US economic growth, consumption has a weak trend that has dragged down economic growth, which in turn affects the performance of the US dollar in the foreign exchange market.
The Federal Reserve's policy signal is unclear: The Federal Reserve keeps interest rates unchanged within the target range of 4.25%-4.5%, and at the same time significantly lowers its growth expectations in 2025 and raises inflation expectations. The Fed's dot chart shows that officials have major differences on expectations of interest rate cuts, which makes the market confused about the future direction of the Fed's monetary policy. Uncertainty in monetary policy increases the unpredictability of the US dollar's exchange rate trend, which is not conducive to the US dollar's foreign exchangeThe market remains strong.
Favorites
Traditional hedging status support: Despite facing many negative factors, the US dollar still occupies an important position in the global financial system. As one of the main safe-haven currencies, it can still attract some safe-haven funds to inflow when the global economy and financial markets are intensifying. For example, when international geopolitical tensions escalate or significant financial risks occur in other regions, the US dollar often gains some support due to safe-haven demand.
Potential possibility of fund return: Some policy measures of the US government, such as tax incentive adjustments to overseas www.xm-forex.companies, may prompt US www.xm-forex.companies to return overseas funds to domestic www.xm-forex.companies. If a large amount of funds flow back to the United States, it will increase demand for the US dollar, thereby supporting the US dollar exchange rate. However, the actual effects of these policies have not been fully demonstrated, and the scale and speed of capital return remains to be seen.
Europe-related news
Nearly negative factors
Economic growth momentum: The pace of economic recovery in the euro zone is slow, and some member countries have weak economic growth. For example, Italy, Greece and other countries are still facing high debt problems, which restricts the overall economic development of the euro zone. At the same time, economic indicators such as industrial production data and service industry PMI in the euro zone performed poorly, indicating insufficient momentum for economic growth, which puts pressure on the euro exchange rate.
Inflation problems continue to be plagued by: the inflation level in the euro zone has not met the expected target of the European Central Bank, and the continued low inflation and even deflation risks have limited the ECB's monetary policy operation space. If the European Central Bank adopts further easing policies to stimulate the economy, it may lead to a depreciation of the euro, and market concerns about the economic outlook of the euro zone will also curb investors' demand for the euro.
Favoritative factors
Expected support for policy adjustment: The market expects the European Central Bank to further adjust monetary policy based on the economic situation of the euro zone and take more easing measures, such as adding a large-scale relaxation scale or further reducing interest rates. If subsequent policy adjustments meet market expectations, they will provide certain support for the euro and enhance market confidence in the euro.
Potential improvement in the trade environment: With the changes in the global trade situation, if Europe can gain a favorable position in trade negotiations, increase exports, and improve trade balances, it will be beneficial to the euro. For example, Europe's new trade agreements with other major economies will promote economic growth in the euro zone and promote the appreciation of the euro.
Japan yen related news
Favoritable factors
Health aversion attributes are highlighted: Against the backdrop of increasing global economic uncertainty and intensifying financial market volatility, the traditional safe-haven currency attributes of the yen are highlighted. For example, since April, due to various factors, global stock markets have fluctuated and fell, and investors have sought safe-haven assets, and the demand for the yen has increased, driving the yen to appreciate. The recent decline in the US dollar against the Japanese yen reflects the increased bullish sentiment towards the Japanese yen.
Monetary Policy Stability: The Bank of Japan has long insisted on loose monetary policy, although this has suppressed the appreciation of the yen to a certain extent, but in the environment of a global monetary easing www.xm-forex.competition, the stability of its policies has attracted some funds seeking a stable monetary environment to flow into Japan, indirectly increasing the attractiveness of the yen.
Badfast factors
Weak economic fundamentals: Japan's domestic economy faces many problems, such as aging population has led to a decrease in labor force and shrinking domestic consumer market, and insufficient momentum for economic growth. Although the yen appreciates due to safe-haven demand, weak economic fundamentals may limit its appreciation space. If the global economic situation improves and the market risk aversion sentiment fades, the yen may face pressure to pull back.
Uncertainty of external demand: As an export-oriented economy, Japan's economic development is highly dependent on external demand. The slowdown in global economic growth and the rise of trade protectionism have put Japan's exports in an increasing uncertainty, which has adversely affected the Japanese economy and the yen exchange rate.
Other currency news
GBP: UK economic data performs inconsistently, and the effectiveness of the implementation of the post-Brexit trade agreement remains to be seen. The market has differences on the direction of the Bank of England's monetary policy, and some investors expect the Bank of England to cut interest rates to stimulate the economy, which puts some pressure on the pound. However, the development of the UK in areas such as scientific and technological innovation, as well as some government economic stimulus measures, has also provided certain support for the pound, which fluctuates greatly in the short term.
www.xm-forex.commodity currencies such as Australian dollar and Canadian dollar: Australian dollar, Canadian dollar, etc. are closely related to www.xm-forex.commodity prices. The global economic growth slowed down and the demand for www.xm-forex.commodities weakened, resulting in a decline in www.xm-forex.commodity prices, which in turn suppressed currencies such as the Australian dollar and the Canadian dollar. In addition, some negative data on the domestic economy of Australia and Canada, such as slowing growth in some Australian industries and declining the value of Canadian construction licenses, have also had an adverse impact on their currency.
Renminbi: In the first quarter of 2025, my country's economy maintained a rebound and improved, and the foreign exchange market was generally stable. The RMB exchange rate fluctuates in both directions and remains relatively stable. The domestic spot exchange rate of RMB against the US dollar has appreciated www.xm-forex.compared with the end of 2024. The State Administration of Foreign Exchange stated that it will introduce more foreign exchange facilitation policies and promote foreign exchange management reforms for foreign direct investment, etc., which will help stabilize RMB exchange rate expectations and enhance the attractiveness of RMB in the international market. At the same time, my country continues to expand its opening up to the outside world, actively stabilizes foreign trade and foreign investment, and also provides support for the stability of the RMB exchange rate. However, the uncertainty of the global economic situation and the fluctuations in the US dollar exchange rate may still have a certain impact on the RMB exchange rate.
The foreign exchange market is affected by the joint action of many factors, and the news situation is changing rapidly. When trading, investors need to pay close attention to global economic data, central bank policy trends, and geopolitical situations, www.xm-forex.comprehensively judge currency trends, and make transaction decisions with caution.
The above content is all about "【XM Foreign Exchange Market Review】: Collection of positive and negative news that affects the foreign exchange market". It was carefully www.xm-forex.compiled and edited by the XM Foreign Exchange editor. I hope it will be helpful to your trading! Thanks for the support!
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