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

In the foreign exchange market, the world's largest financial trading market, the daily news is like a war without gunpowder, affecting the exchange rate trends of currencies in various countries. For investors, mastering the latest positive and negative news is the key to seizing the initiative in this trading game. The following is a summary of important news that affects the foreign exchange market on March 17, 2025.

Macroeconomic data triggered market fluctuations

A series of macroeconomic data recently released have become an important factor affecting the foreign exchange market. Data released by the U.S. Department of Labor showed that the number of initial unemployment claims unexpectedly rose to 225,000 in the week ended March 12, higher than the market expectations of 215,000. This data implies that the U.S. labor market may show signs of loosening, putting some pressure on the dollar. As an important pillar of the U.S. economy, changes in data often trigger markets to reassess the U.S. economic outlook.

At the same time, the Eurozone released the February Consumer Price Index (CPI) data showed that inflation fell slightly from the previous value at 2.8%, but it was still above the ECB's 2% target level. This data has caused the market to doubt the direction of the European Central Bank's monetary policy. On the one hand, the decline in inflation may prompt the ECB to consider further relaxing monetary policy to stimulate the economy; on the other hand, inflation rates above the target limit the space for the ECB to cut interest rates sharply, and the euro exchange rate has therefore increased volatility after the data was released.

Increased uncertainty in trade policy

Uncertainty in trade policy continues to plague the foreign exchange market. US President Trump's tariff policy has always been a concern for the marketfocus. Although there have been previous reports that Trump may reduce tariffs on Canada and Mexico, the specific implementation details and timing are still unclear. Any changes in tariff policies may have a profound impact on the trade balance and economic growth of relevant countries, which in turn affects their currency exchange rates.

If the United States lowers tariffs on Canada and Mexico, it will help promote trade between the three countries and boost the Canadian dollar and the Mexican peso. On the contrary, if tariff policies remain unchanged or tightened further, it may trigger an escalation of trade frictions, leading to a slowdown in global economic growth and a warming market risk aversion sentiment. The US dollar, as a traditional safe-haven currency, may be supported, while currencies such as the Canadian dollar and peso are facing depreciation pressure.

Political Dynamics of the Central Bank

The central bank's monetary policy decisions have a decisive impact on the foreign exchange market. Recently, the People's Bank of China authorized the China Foreign Exchange Trading Center to announce that the central price of the RMB exchange rate in the interbank foreign exchange market on March 5, 2025 was USD 7.1714 yuan, up 25 points from the previous trading day. This increase hit its highest since January 21, 2025.

In addition, the China Foreign Exchange Trading Center announced that starting from April 1, 2025, the derivative transaction fee for the interbank RMB foreign exchange market for two-year (inclusive) or above period will be exempted, and the period is temporarily exempted for three years. This measure aims to further improve the quality and efficiency of financial services for the real economy, support financial institutions to better serve enterprises' long-term exchange rate risk management needs, and to a certain extent, it has also enhanced the attractiveness of the RMB in the foreign exchange market.

Global, as the monetary policies of developed economies such as Europe and the United States enter a cycle of interest rate cuts, the market's expectations for monetary policy differentiation of central banks in various countries have increased. This differentiation may lead to further widening interest rate spreads between different currencies, thereby aggravating volatility in the foreign exchange market.

Geopolitical risks affect market sentiment

The changes in geopolitical situation have a significant impact on foreign exchange market sentiment. Although the 30-day ceasefire agreement was reached in the Russian-Ukrainian conflict, the United States' restrictions on Russia's energy payments still disturbed Russia's crude oil export pattern, affecting the global energy market, and thus affecting the foreign exchange market. In addition, Houthi armed leaders said that the "maritime shipping ban" in the Red Sea would cover US ships. The news caused market concerns about the situation in the Middle East, and the risk aversion sentiment warmed up, and the price fluctuations of safe-haven assets such as gold have also affected the exchange rate stability of currencies in relevant countries.

In general, the current foreign exchange market is facing a avatradescn.complex and changing news environment, with factors such as macroeconomic data, trade policies, central bank policies and geopolitical risks intertwined. Investors need to pay close attention to these information trends and formulate trading strategies with caution.

The above content is about "[Ava Foreign Exchange Decision Analysis]: Positive and negative losses that affect the foreign exchange marketThe entire content of "Entertainment" was carefully avatradescn.compiled and edited by Aihua Avatrade Forex editor. I hope it will be helpful to your transactions! Thank you for your support!

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