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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "【Aihua Official Website】: 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 trend of the currency, and for investors, it is crucial to accurately grasp these news. The following is a summary of the positive and negative news that affected the foreign exchange market on March 19, 2025.
1. Economic data related news
U.S.: The recently released U.S. retail sales data are mixed. Some data show that consumer spending has some resilience, but at the same time, sales in some areas also decline. This data reflects the avatradescn.complexity of the US consumer market and creates certain uncertainty about the trend of the US dollar. Consumption, as an important driver of US economic growth, will affect market expectations of US economic outlook. If subsequent consumption data continues to be weak, it may increase the downward pressure on the US dollar; on the contrary, if consumption can maintain stable growth, it is expected to support the US dollar.
China: Data on bank foreign exchange settlement and sales and foreign payments on behalf of customers released by the State Administration of Foreign Exchange in February 2025 showed that in February, banks settled RMB 113.24 billion and sold RMB 1207 billion, and foreign capital increased its holdings of domestic bonds and stocks totaling US$12.7 billion. The inflow of foreign capital provides support to the RMB in both supply and demand balance and market confidence in the foreign exchange market, which is beneficial to the RMB exchange rate. This shows that the international market's interest in Chinese assets has increased. With the warming of China's capital market and real estate market, and the collective rise of technology avatradescn.companies, the cost-effectiveness of Chinese assets' investment has become increasingly prominent, attracting more overseas investmentsfunds.
2. Central Bank Policy Trends
Feder: The market's expectations for the Fed's interest rate cut have always been an important factor affecting the foreign exchange market. At present, although the Fed has not yet made a clear next move, the market generally expects it to continue to adjust its monetary policy in 2025. If the Fed accelerates its rate cut, the US dollar may be suppressed to a certain extent, because lower interest rates will reduce the attractiveness of US dollar assets and prompt funds to flow to other currencies. On the contrary, if the Fed maintains its current interest rate or cuts less than expected, it may support the US dollar.
ECB: The ECB Management avatradescn.committee recently stated that the uncertainty brought about by changes in US policy exceeds the COVID-19 pandemic. The market expects that by the end of 2025, the European Central Bank will cut interest rates by another 125 basis points, bringing the deposit rate to 1.75%. However, some market participants believe the ECB needs to speed up the rate cut in order to support the eurozone economy lagging behind the United States and the United Kingdom. The direction of the European Central Bank's monetary policy will have an important impact on the euro. If the interest rate cut exceeds expectations, the euro may weaken; on the contrary, if the policy is relatively stable, the euro is expected to gain certain support.
3. Geopolitical situation
Trade policy uncertainty: Trade policy uncertainty in the Trump era still enveloped the global economy. Capricious tariff policies have caused the U.S. rekindled expectations for a rekindled US dollar to continue. This uncertainty affects investors' confidence in US dollar assets, and funds flow out of the US market, putting pressure on the US dollar exchange rate. At the same time, the currencies of other countries will also be affected to varying degrees due to uncertainty in trade policies, especially those with high dependence on the United States for trade.
Potential impact of regional conflicts: The conflict situation in some parts of the world is still tense. Although it has not directly caused a severe impact on the foreign exchange market, once the conflict escalates, it may trigger a warming market risk aversion sentiment. Under the demand for safe-haven, investors often seek relatively safe assets. Traditional safe-haven currencies such as the US dollar and the Japanese yen may be favored, while some risky currencies may face downward pressure.
4. Money market performance
The RMB has strong trend: On March 18, the offshore RMB rose for three consecutive trading days, rising to around 7.22. As of 17:00, the offshore RMB exchange rate against the US dollar was 7.2242, with an intraday appreciation of 0.05%; the onshore RMB exchange rate against the US dollar closed at 7.2216 at 16:30, up 172 points from the previous trading day. In addition, on March 17, the main term interest rates of the offshore RMB Hong Kong Interbank Offerings (CNHHIBOR) rose across the board, reflecting changes in the market demand for RMB liquidity, indirectly confirming the growth of RMB demand and being beneficial to the RMB exchange rate.
Other currencies performance: On March 17, the Australian dollar rose 1.01% against the US dollar to 0.6387; the euro rose 1.01% against the US dollar to 1.0944. The rise in these currencies reflects the market's optimistic forecast for its economic outlook or monetary policyIn the meantime, it may also be driven by the weakening of the US dollar. The US dollar fluctuated against the Russian ruble, falling 2.04% on March 17 to 83.73, and then there were changes in rise and fall, which was related to Russia's economic situation and geopolitical factors.
The foreign exchange market is affected by the interweaving of various factors. Investors need to pay close attention to various news, conduct avatradescn.comprehensive analysis, and make investment decisions with caution.
The above content is all about "【Aihua Official Website】: Collection of Positive and Negative News that Influences the Foreign Exchange Market". It was carefully avatradescn.compiled and edited by Aihua Avatrade Forex editor. I hope it will be helpful to your trading! Thanks for the support!
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