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

At a time when the global economy is closely linked, the foreign exchange market is always impacted and affected by various news. On March 5, 2025, many positive and negative news were intertwined, adding more uncertainty to the trend of the foreign exchange market, and investors need to pay close attention.

Policy level news

Domestic foreign exchange management policies continue to be optimized

Good news has been sent from the State Administration of Foreign Exchange that in 2025, foreign exchange management work will be anchored in establishing and improving a "more convenient, more open and safer" foreign exchange management system and mechanism. In terms of foreign exchange facilitation reform, more technology-based enterprises are expected to be included in the cross-border financing facilitation pilot, which will guide overseas high-quality capital to invest in domestic high-tech industries, help improve the capital acquisition ability of domestic related enterprises, indirectly enhance the attractiveness of RMB assets, and form potential support for the RMB exchange rate. At the same time, we will promote institutional opening of the foreign exchange field, such as optimizing the management of overseas listing funds of domestic enterprises, promoting corporate foreign debt management reform, and continuously improving the gold pool policy of multinational corporate capital. These measures will help improve the internationalization of my country's financial market, attract more foreign capital inflows, and promote the activity and stability of the foreign exchange market.

Indonesia has issued new regulations on foreign exchange retention

The Indonesian government issued a new regulation on February 17, requiring natural resource exporters to retain all foreign exchange income in Indonesia for at least one year. The policy came into effect on March 1. This regulation aims to increase Indonesia's foreign exchange reserves and stabilize the Indonesian rupiahexchange rate. According to Reuters, the move is expected to increase Indonesia's foreign exchange reserves by $80 billion in 2025, with potential returns exceeding $100 billion in 12 months. In the short term, this policy has increased the domestic foreign exchange supply in Indonesia and has a certain relief to the depreciation pressure of the Indonesian rupiah. In the foreign exchange market, the Indonesian rupiah is expected to gain some support. However, Indonesian business avatradescn.community expressed concern about the new regulations, believing that it may push up the operating capital costs of enterprises. If business operations are affected by a major negative impact, it may have an adverse impact on the Indonesian economy and the Indonesian rupiah exchange rate in the long run.

Economic data related news

Important domestic economic data to be released

After this week, a number of important economic data will be released in China. On March 7, the State Administration of Foreign Exchange will release foreign exchange reserve data for February, and the General Administration of Customs will release import and export data for January-February. Foreign exchange reserve data can reflect my country's foreign assets and liabilities and balance of payments. If the foreign exchange reserve data increases, it usually means that my country's balance of payments is in good condition, and the foreign exchange supply in the foreign exchange market is sufficient, which is a good thing for the RMB exchange rate. Import and export data directly reflect the activity of my country's foreign trade. Strong export data will often bring more foreign exchange inflows, enhance market demand for the RMB, and promote the appreciation of the RMB; on the contrary, if the import data grows sharply and export performance is poor, it may lead to an increase in foreign exchange outflows, putting pressure on the RMB exchange rate.

International economic data and central trends

Internationally, next week, the EU will release data such as the Eurozone CPI in February, the Eurozone unemployment rate in January, the Eurozone PPI in January; the United States will release economic data such as the ISM manufacturing PMI in February, all new manufacturing orders in January, the unemployment rate in February, and the non-agricultural employment population after the seasonal adjustment; Canada will also release economic data such as the labor participation rate in February, the average hourly wage in February. These data will fully reflect the economic performance of major economies such as Europe, the United States and Canada. For example, if the U.S. non-farm employment population data performs strongly, it will usually increase market confidence in the U.S. economy, drive the dollar to appreciate, and thus affect the exchange rate trend of other currencies against the dollar. At the same time, the European Central Bank will announce the latest interest rate resolution, and the market generally expects that the European Central Bank will announce a 25 basis point interest rate cut and lower the deposit rate to 2.5%. The interest rate cut measures may lead to an increase in the euro area's money supply. In the foreign exchange market, the euro may face depreciation pressure, and the exchange rate of the euro against other major currencies will also fluctuate accordingly.

The impact of international events

Geopolitical risks remain

At present, the global geopolitical situation remains avatradescn.complex and changeable, and tensions in some regions are escalating from time to time. Geopolitical risks often trigger a heated risk aversion sentiment in the market. In the foreign exchange market, investors usually tend to buy safe-haven currencies, such as the US dollar, the Japanese yen, the Swiss franc, etc., which leads to an increase in demand for these currencies and appreciation. On the contrary, currencies that are closely linked to geopolitical conflict areas or have poor economic stability may face depreciation pressure. For example, if the Middle East isThe intensification of geopolitical conflicts, as an important oil-producing region in the world, may affect oil supply and global economic recovery expectations, and thus have a significant impact on currency pairs related to oil trade in the foreign exchange market.

In general, on March 5, 2025, the foreign exchange market was affected by many news. Active policy reforms, the upcoming announcement of domestic and foreign economic data, and avatradescn.complex international events were intertwined. Investors should carefully analyze various news, grasp market trends, and reasonably adjust foreign exchange investment strategies.

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

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