A collection of positive and negative news that affects the foreign exchange market

In the foreign exchange market, many news factors always influence the trend of the currency and the decisions of investors. For foreign exchange trading on March 25, the following positive and negative news are worth paying attention to.

1. Economic data level

(I) US dollar-related data

The recent performance of US economic data has been uneven, and the impact on the US dollar trend is aihuaforex.complex. Data released by the U.S. Department of Labor shows that the number of first-time unemployment claims in the week ending March 1 fell to 221,000, lower than the market expectations of 235,000, which shows that the U.S. labor market still maintains a certain degree of resilience and provides some support for the US dollar. However, consumer credit in January was US$18.08 billion, which was higher than the expected US$14.5 billion, but it fell sharply from the previous value of US$40.847 billion, which implies that the borrowing capacity and willingness of US consumers have changed, which may have an impact on the consumption level of the US economy, and to some extent weaken the strong foundation of the US dollar. This data differentiation has caused differences in the market's judgment on the trend of the US dollar. Investors need to pay close attention to the release of subsequent data, such as the final value of the annualized quarterly rate of the actual GDP in the fourth quarter, the final value of the annualized quarterly rate of the core PCE price index in the fourth quarter, etc. These data will further reveal the health of the US economy and affect the performance of the US dollar in the foreign exchange market.

(II) Other currencies related data

The euro zone lacks the latest key economic data, but the overall slow pace of economic recovery has not changed. If the subsequent data released fails to show that the momentum of economic growth has increased, it may further suppress the market's bullish sentiment towards the euro. For the pound, the UK has a shortage ofMajor economic data have been released, but the market's adjustment to the Bank of England's expectations for interest rate cuts has affected the pound's trend. Traders lowered their bets on the Bank of England's interest rate cut in May, after the previous probability was 70%, and now it has dropped to 60%. UK interest rate futures show that the Bank of England's interest rate will cut by 43 basis points by the end of 2025, lower than the 52 basis points expected before the interest rate resolution, which has temporarily suspended the pound bulls, and the pound against the US dollar exchange rate fluctuates under the influence of relevant news. In the Asian market, the initial value of Japan's service industry PMI in March was 49.5, aihuaforex.compared with 53.7 last month; the initial value of the manufacturing industry PMI in March was 48.3, aihuaforex.compared with 49.0 last month. The weakening of economic data may put some pressure on the yen exchange rate, affecting the conversion ratio of the yen to other currencies in the foreign exchange market.

2. Central Bank Policy Trends

(I) Fed Policy Trends

The Federal Reserve maintained interest rates unchanged in its FOMC statement issued on March 19. The median estimate of the dot chart shows that a total of 50 basis points will be cut this year, and the U.S. economic growth expectation will be lowered. This decision caused the US dollar index to rise and fall, which was relatively positive for other currencies. For example, the euro, pound, etc. in non-US currencies have gained room for growth to a certain extent due to this change in the US dollar. However, investors still need to pay close attention to the subsequent U.S. economic data and speeches by Federal Reserve officials to judge the subsequent trend of the U.S. dollar. If economic data continues to be weak in the future, the Federal Reserve may accelerate the pace of interest rate cuts, further weakening the US dollar; on the contrary, if economic data improves, the Federal Reserve's policy attitude may change, providing support for the US dollar.

(II) Other central bank policies

The ECB Management aihuaforex.committee stated that increasing military expenditures may not necessarily slow down the pace of interest rate cuts, which has triggered many speculations in the market about the direction of the ECB's monetary policy. If the European Central Bank rate cuts slow down in the future, the euro is expected to gain support; on the contrary, accelerated interest rate cuts may lead to a downward trend in the euro. The Swiss National Bank is expected to cut interest rates by 25 basis points, and interest rates will fall to negative again. If the interest rate cut is implemented, the Swiss franc may be under depreciation pressure, affecting the exchange rate between the Swiss franc and other currencies. The Bank of England's dynamics also affect the pound's trend. Changes in market expectations for the Bank of England's interest rate cuts have caused the pound to fluctuate against the US dollar. If the Bank of England shows a more hawkish attitude in the future, the pound is expected to rebound and bullish sentiment will be boosted; if economic data is poor and interest rate cut expectations are strengthened, the pound may weaken further. In addition, the Indonesian government has issued a new regulation requiring natural resource exporters to retain all foreign exchange income in Indonesia for at least one year. The policy will take effect on March 1 and is expected to increase Indonesia's foreign exchange reserves by US$80 billion in 2025, with a potential income of more than US$100 billion in 12 months. This policy aims to stabilize the Indonesian rupiah exchange rate, which may affect the exchange rate of the Indonesian rupiah and other currencies in the Southeast Asian foreign exchange market.Rate relationship.

III. Geopolitical and trade situation

(I) Geopolitical impact

The United States imposes new sanctions on relevant entities in Iran, and this move has affected the situation in the Middle East. As an important global crude oil producing area, the instability of the Middle East may lead to fluctuations in crude oil prices, which will in turn affect the currency exchange rates of relevant countries. For example, the Iranian currency Riyal may face greater pressure due to sanctions, while countries that rely on Middle East crude oil imports may also be indirectly affected by potential changes in energy costs. In addition, the US-Russia talks focus on the safety of navigation in the Black Sea. Any changes in the regional situation may affect the economy and trade of relevant countries, thus having a chain reaction to the foreign exchange market.

(II) Impact of the trade situation

European and US tariff negotiations are in a deadlock, leaving the euro/dollar to continue under pressure. Tension in trade relations is not conducive to the economic recovery of the euro zone, and thus has a negative impact on the euro exchange rate. The Bank of Canada governor hinted that the way the Bank of Canada sets key interest rates will change as trade uncertainty with the United States makes long-term forecasts more difficult, which will also have an impact on the performance of the Canadian dollar in the foreign exchange market. At the same time, global trade protectionism is rising and international trade tensions are intensifying, which has increased uncertainty in the foreign exchange market and rising risk aversion sentiment among investors may lead to funds flowing to traditional safe-haven currencies, such as the US dollar, the Japanese yen, etc., affecting the exchange rate relationship between currencies.

In general, the current foreign exchange market is affected by the interweaving of multiple factors, and the trends of each currency pair are full of uncertainty. When conducting foreign exchange trading, investors need to fully consider the above positive and negative news, aihuaforex.combine their own risk tolerance and investment goals, and make trading decisions with caution.

The above content is all about "【Ava Aihua Foreign Exchange Official Website】: Collection of Positive and Negative News that Influences the Foreign Exchange Market". It was carefully aihuaforex.compiled and edited by Aihua Avatrade Foreign Exchange Editor. I hope it will be helpful to your trading! Thanks for the support!

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