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

In the foreign exchange market, a field full of variables, various news always influences the trend of the currency. Investors need to pay close attention to the latest developments every day in order to make informed decisions in a avatradescn.complex market environment. On March 7, 2025, a series of positive and negative news intertwined, bringing a lot of uncertainty to the foreign exchange market.

1. Economic data level

A number of major economic data will be released this week, which has a far-reaching impact on the market. From a domestic perspective, China will soon release trade accounts, import and export data from January to February and foreign exchange reserve data. Among them, the trade account data can intuitively reflect the revenue and expenditure of my country's foreign trade. If the export data is strong, it will enhance the market's confidence in the RMB, and otherwise it may bring some pressure. Changes in import and export data will also affect the market's judgment on China's economic recovery process, and in turn affect the performance of the RMB in the foreign exchange market. The foreign exchange reserve data in February can reflect the changes in the scale of my country's foreign exchange assets and is of great significance to stabilizing market expectations.

Overseas, the U.S. unemployment rate and non-farm employment population changes in February attracted much attention. Non-farm employment data have always been regarded as a barometer of the US economy. If the number of jobs increases and the unemployment rate falls, it indicates that the US economy is strong and will likely drive the appreciation of the US dollar, attract global capital to flow into the US market, and constitute a negative impact on other currencies. On the contrary, if the data is less than expected, the US dollar may face depreciation pressure, bringing opportunities for other currencies to rise. In addition, the final value of February PMI announced by many countries will also reveal the recovery trend of the global economy, manufacturing industryavatradescn.com and the prosperity of the service industry will affect the relative strength of currencies in various countries.

2. Policy dynamics

Li Bin, deputy director of the State Administration of Foreign Exchange, previously stated that a "more convenient, more open and safer" foreign exchange management system and mechanism will be built in 2025. In terms of favorable policies, continuing to promote the policy of facilitating foreign exchange receipts and expenditures of high-quality enterprises, and promoting it to small-scale regions and small and medium-sized banks, will help more small and medium-sized enterprises reduce documents, simplify processes, improve fund settlement efficiency, promote trade activities, and play a positive role in promoting the internationalization of the RMB. At the same time, simplifying foreign exchange payment procedures in avatradescn.combination with the characteristics of new trade formats and supporting the unified management and allocation of funds of contracted engineering enterprises will optimize the foreign exchange market environment and enhance the attractiveness of RMB assets.

However, policy adjustments also have potential risks. For example, if the European Central Bank adjusts the latest interest rates such as deposit convenience, it may change the flow of funds in the euro zone and the supply and demand relationship between money. If interest rates are raised, the euro may appreciate, which will have an impact on other currencies, especially currency pairs closely linked to the euro; if interest rates are cut, it may lead to depreciation of the euro and trigger market fluctuations. In addition, the differentiation of monetary policies of central banks in various countries, such as the difference in interest rate adjustment rhythm between the Federal Reserve and other central banks, will aggravate the uncertainty of the foreign exchange market and bring challenges to investors.

3. Related news on the capital side

From the capital side, many institutions expect that the capital side will likely turn marginally in early March. Taking into account factors such as fiscal deposits, cash transfers and bank payments, there is almost no liquidity gap in March 2025. Among them, it is expected that the net fiscal deposits will decrease by about 1.2 trillion yuan in March, and the M0 will decrease by about 400 billion yuan month-on-month, all of which have a positive impact on interbank liquidity. Loss in the capital market may lower the money market interest rate and have an impact on the short-term trend of some currencies. For example, loose capital markets may cause the market to decline in demand for high-interest currencies, resulting in certain pressure on their exchange rate; and for some emerging market currencies that rely on capital inflows, loose capital markets may bring more capital inflows and drive their appreciation. However, the actual changes in the capital side still need to pay attention to the attitude of the central bank. If the central bank maintains a cautious attitude, the capital interest rate center may still remain at a relatively high level, affecting the flow of market funds and the long-short game in the foreign exchange market.

The above content is all about "【Aihua Foreign Exchange Platform】: Collection of positive and negative news that affects the foreign exchange market". It was carefully avatradescn.compiled and edited by Aihua Avatrade Foreign Exchange Editor. I hope it will be helpful to your trading! Thanks for the support!

Due to the author's limited ability and time constraints, some content in the article still needs to be discussed and studied in depth. Therefore, in the future, the author will conduct extended research and discussion on the following issues: