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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "【Avatradescn Forex Platform】: 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:
In the aihuaforex.complex ecology of the foreign exchange market, there are many news that affects the trend of the currency every day. For foreign exchange trading on March 28, it is crucial to sort out all kinds of positive and negative news so that investors can better grasp market trends.
Impact at the economic data level
(I) US economic data
The US economic data has a far-reaching impact on the US dollar and foreign exchange market. Recently, the US soft data is still weak, and consumer confidence has declined sharply, but the service industry PMI is stronger than expected. On March 28, investors need to pay attention to the release of a series of economic data in the United States, such as the March Consulting Chamber of aihuaforex.commerce Consumer Confidence Index, which can intuitively reflect consumers' confidence in the economic outlook. If the data is higher than expected, it will boost the US dollar, otherwise it may suppress the US dollar. In addition, the subsequent release of data on US GDP growth rate, inflation rate and other data will continue to affect market expectations for the US dollar trend. For example, if GDP growth slows down, it may weaken the aihuaforex.competitiveness of the US dollar in the foreign exchange market and prompt investors to turn to other currencies; and changes in inflation will affect the Federal Reserve's monetary policy decisions, which in turn affects the US dollar exchange rate.
(II) Economic data of other countries
European economic growth faces challenges. Although GDP unexpectedly increased by 0.1% month-on-month at the end of 2024, the economic growth of core member states Germany and France shrank, and employment growth in the fourth quarter was only 0.1% month-on-month, lower than the previous quarter. The recent manufacturing PMI data released by the euro zone is not optimistic. If the subsequent industrial production index and consumer confidence index continue to be sluggish, it will suppress the euro exchange rate. In Japan, the initial value of the service industry PMI in March fell to 49.5, and the initial value of the manufacturing industry PMI was 48.3. The economyThe data weakened. If subsequent inflation data, retail data, etc. are not ideal, the yen exchange rate may be under pressure. The UK has lacked major economic data releases recently, but the market's adjustment to the Bank of England's interest rate cut expectations affects the trend of the pound. Subsequent releases such as employment data and GDP data will become the focus of market attention and affect the performance of the pound in the foreign exchange market.
The central bank's monetary policy orientation
(I) Federal Reserve's monetary policy
The direction of the Federal Reserve's monetary policy has always been a key influencing factor in the foreign exchange market. The market has differences on the Fed's expectations for future interest rate adjustments. Recently, Xuan Changneng, Vice President of the People's Bank of China, said at the Boao Forum on Asia that the central bank will take the opportunity to lower the reserve requirement ratio and interest rates based on the domestic and international economic and financial situation. This statement reflects changes in the global monetary policy environment and also affects market expectations for Fed policy. If the Fed releases a hawkish signal, implying that interest rate hikes or delays interest rate cuts, it will attract funds to flow into the US dollar, push the US dollar to appreciate, and the non-US currency will depreciate; on the contrary, if the Fed shows a dovish attitude and accelerates the rate cut process, the US dollar will face downward pressure, providing room for non-US currency to rise.
(II) Monetary policies of other central banks
The European Central Bank is expected to continue its easing policy, and the market generally expects that interest rate cuts by 25 basis points again next month. Continuous easing will increase the euro zone's money supply, reduce the euro's return on assets, weaken the euro's attractiveness in the international currency market, and lead to a downward trend in the euro's exchange rate. The Bank of Japan has been aihuaforex.committed to "normalizing" the economy and has steadily recovered positive interest rates, and most economists expect at least one interest rate hike this year. If the Bank of Japan subsequent interest rate hikes will attract international capital inflows and drive the appreciation of the yen; if the deterioration of economic data slows down the pace of interest rate hikes, the appreciation of the yen will be limited. On the Bank of England, the probability of traders' betting on the Bank of England's interest rate cut in May dropped from 70% to 60%. Subsequent monetary policy decisions of the Bank of England will be based on domestic economic data, and its policy adjustments will directly affect the pound exchange rate.
Impact of geopolitical and trade situation
(I) Geopolitical situation
Geopolitical tensions have a significant impact on the foreign exchange market. Recently, the US government has cracked down on Houthi armed forces and strengthened sanctions on Iran and Venezuela, and Israel has launched a new military operation. These geopolitical conflicts have caused market risk aversion to fluctuations. When risk aversion is warming, investors tend to buy safe-haven currencies such as the US dollar and the Japanese yen to promote their appreciation; if geopolitical tensions ease and risk appetite rebounds, high-risk currencies in non-US currencies may be favored, such as the Australian dollar, New York dollar, etc. In addition, the Ukrainian Peace and Security Summit initiated by Macron was held in France. The meeting focused on discussing the construction of Ukrainian aid and Europe's own security protection system. The results of the meeting will have a certain impact on the foreign exchange market. If the meeting is reached,Agreements that are conducive to regional stability will alleviate market risk aversion, and otherwise may intensify market volatility.
(II) Trade situation
The uncertainty of the trade situation has an important impact on the currency exchange rates of various countries. Regarding US President Trump's announcement that it would impose a 25% tariff on imported cars, a spokesperson for the Foreign Ministry said that China has noticed that the major U.S. trading partners have responded one after another. A spokesperson for the Ministry of aihuaforex.commerce also said that China has filed a lawsuit under the WTO dispute settlement mechanism for the US's increased tariff measures. The escalation of trade frictions will pose a threat to the global economy and foreign exchange market, and currencies of countries that rely on exports may depreciate, such as South Korea, Germany, etc.; while currencies of countries with large trade surpluses are relatively supportive. In addition, adjustments to trade policies of various countries, such as tariff changes and the signing of trade agreements, will directly affect the supply and demand relationship of currencies of relevant countries in the foreign exchange market, and thus affect the exchange rate trend.
In summary, on March 28, 2025, the foreign exchange market was affected by the interweaving of economic data, central bank policies, geopolitics and trade situations, and the trend of each currency pair was full of uncertainty. Investors need to pay close attention to various news trends, aihuaforex.comprehensively analyze the market situation, and make investment decisions cautiously to cope with aihuaforex.complex changes in the foreign exchange market.
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