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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Aihua Foreign Exchange Market Review]: 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 foreign exchange market, various types of news always affect the long and short direction of the currency, providing a key basis for investors' decision-making. The following is a summary of important positive and negative news that affects the foreign exchange market on March 6, 2025.
Economic data
Domestic data
China Foreign Exchange Trading Center announced that the mid-price of the RMB exchange rate in the interbank foreign exchange market on March 4, 2025 was RMB 1 USD to RMB 7.1739, up 6 basis points. This increase in the intermediate price shows to a certain extent the short-term strong signal of the RMB in the foreign exchange market, which has provided positive support for the RMB bulls.
International Data
Internationally, the release of some data affects the market's expectations for different currencies. For example, the EU will soon release data such as the Eurozone CPI, the Eurozone unemployment rate in January, and the Eurozone PPI in January; the United States will also release economic data such as the ISM manufacturing PMI in February, the full number of new manufacturing orders in January, the unemployment rate in February, and the non-agricultural employment population after the quarterly adjustment in February. If these data perform strongly, it will be beneficial to the corresponding currency, otherwise it may have negative impacts. Previously, the market's expectations for economic data have been reflected in the currency price to a certain extent, and the deviation between actual data and expectations will become an important driving force for market fluctuations.
Policy Dynamic Level
Domestic Policy
From the domestic policy perspective, at the 2025 National Foreign Exchange Management Work Conference,The State Administration of Foreign Exchange will anchor the key work to establish and improve a "more convenient, more open and safer" foreign exchange management system and mechanism. If more technology-based enterprises are included in the pilot program of cross-border financing facilitation, this measure will help attract foreign capital inflows, enhance the attractiveness of RMB assets, and pose a potential benefit to the RMB exchange rate. In addition, measures such as promoting the optimization and expansion of trade facilitation policies and improving the facilitation level of foreign exchange business in new trade formats will help promote trade development and improve the balance of payments. In the long run, it will also play a positive role in the stability of the RMB exchange rate.
International Policy
Internationally, central banks' policies have attracted much attention. The European Central Bank is about to announce the latest interest rate resolution, and the market generally expects to announce a 25 basis point interest rate cut, lowering the deposit rate to 2.5%. If interest rate cuts are implemented, the euro area's money supply will increase, which may lead to a depreciation of the euro, which is beneficial to the euro's short sellers. The Fed's subsequent monetary policy trend, especially its assessment of the US economic situation and its views on inflation and employment markets, will have a significant impact on the foreign exchange market. If the Fed releases a hawkish signal, it may boost the US dollar, and vice versa.
Geopolitical and other levels
Geopolitical factors
The changes in the geopolitical situation have a profound impact on the foreign exchange market. Although the international geopolitical situation has been relatively stable in recent times, tensions in some areas remain. For example, if geopolitical relations in the Middle East fluctuate, it may affect oil supply, which in turn triggers fluctuations in oil-linked currencies and safe-haven currencies. If tensions escalate, investors may seek safe-haven assets, such as the Swiss franc and the Japanese yen, to promote the appreciation of these currencies, which is beneficial to their bulls; while currencies that are more closely related to geopolitical risks may face depreciation pressure, which is beneficial to the bears.
Industry dynamics and other factors
Industry dynamics will also have an impact on the foreign exchange market. Taking the energy industry as an example, fluctuations in international oil prices will affect the currency performance of oil exporters and importers. There is a clear expectation of increased supply in the crude oil market in recent times, with weak growth on the demand side and continuing to be under pressure. If oil prices continue to fall, it will be a negative factor for the currencies of oil exporters, but may bring certain benefits to the currencies of oil importers, because the reduction in import costs will help improve trade revenue and balance. In addition, changes in the global trade situation, such as the intensification or easing of trade frictions, will also affect the long-short sentiment of currencies in various countries. If trade frictions ease, it will help the rise of risky currencies, and otherwise it may prompt investors to turn to safe-haven currencies.
Overall, the foreign exchange market was affected by the interweaving of many factors on March 6, 2025. Investors need to pay close attention to the dynamic changes of various news, conduct avatradescn.comprehensive analysis, and make investment decisions with caution.
The above content is all about "[Ihua Foreign Exchange Market Review]: 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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