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

The foreign exchange market has always been turbulent, and is constantly changing due to economic data, central bank policies, geopolitics and other factors. The following is a review of the positive and negative news that affected the foreign exchange market on March 24, 2025.

Economic Data Level

The recently released economic data has a significant impact on the trends of major currencies. From the US perspective, its economic data performance is mixed. Data released by the U.S. Department of Labor shows that the number of first-time unemployment claims in the week ending March 1 fell to 221,000, lower than the market expectations of 235,000, which shows that the U.S. labor market still maintains a certain degree of resilience and provides some support for the US dollar. However, consumer credit in January was US$18.08 billion, which was higher than the expected US$14.5 billion, but it fell sharply from the previous value of US$40.847 billion, which implies that the borrowing capacity and willingness of US consumers have changed, which may have an impact on the consumption level of the US economy, and to some extent weaken the strong foundation of the US dollar.

In the euro zone, although the latest key economic data are currently lacking, the overall slow pace of economic recovery has not changed. If the subsequent data released fails to show that the momentum of economic growth is enhanced, it may further suppress the market's bullish sentiment towards the euro, otherwise it will boost the euro. For the pound, the UK has lacked major economic data releases recently, but the market's adjustment to the Bank of England's interest rate cut expectations has affected the pound's trend. Traders lowered their bets on the Bank of England's interest rate cut in May, after the probability was 70%, and now it has dropped to 60%. UK interest rate futures show that the Bank of England's interest rate will cut by 43 basis points by the end of 2025, lower than the 52 basis points expected before the interest rate resolution, which has put the pound bulls temporarily on hold.The pound sterling exchange rate fluctuates against the US dollar under the influence of relevant news.

Central Bank Policy Trends

The Fed's policy direction has always been the focus of attention in the foreign exchange market. In the FOMC statement released on March 19, the Federal Reserve kept interest rates unchanged, and the median estimate of the dot chart showed that it would cut interest rates by a total of 50 basis points this year, while lowering expectations for US economic growth. This decision caused the US dollar index to rise and fall, which was relatively positive for other currencies. For example, the euro, pound, etc. in non-US currencies have gained room for growth to a certain extent due to this change in the US dollar. However, investors still need to pay close attention to the subsequent U.S. economic data and speeches of Federal Reserve officials to judge the subsequent trend of the U.S. dollar.

For the European Central Bank, the ECB Management avatradescn.committee stated that increasing military spending may not necessarily slow down the pace of interest rate cuts, which has triggered many speculations about the direction of the European Central Bank's monetary policy. If the European Central Bank rate cuts slow down in the future, the euro is expected to gain support; on the contrary, accelerated interest rate cuts may lead to a downward trend in the euro. The Swiss National Bank is expected to cut interest rates by 25 basis points, and interest rates will fall to negative again. If the interest rate cut is implemented, the Swiss franc may be under depreciation pressure, affecting the exchange rate between the Swiss franc and other currencies.

The Bank of England's dynamics also affect the pound trend. Changes in market expectations for the Bank of England's interest rate cuts have caused the pound to fluctuate against the US dollar. If the Bank of England shows a more hawkish attitude in the future, the pound is expected to rebound and bullish sentiment will be boosted; if economic data is poor and interest rate cut expectations are strengthened, the pound may weaken further.

Geopolitics and Trade Situation

In terms of geopolitics, the United States imposed new sanctions on relevant entities in Iran, which has affected the situation in the Middle East. As an important global crude oil producing area, the instability of the Middle East may lead to fluctuations in crude oil prices, which will in turn affect the currency exchange rates of relevant countries. For example, the Iranian currency Riyal may face greater pressure due to sanctions, while countries that rely on Middle East crude oil imports may also be indirectly affected by potential changes in energy costs.

In the trade situation, European and American tariff negotiations have reached a deadlock, leaving the euro/dollar to continue under pressure. Tension in trade relations is not conducive to the economic recovery of the euro zone, and thus has a negative impact on the euro exchange rate. The Bank of Canada governor hinted that the way the Bank of Canada sets key interest rates will change as trade uncertainty with the United States makes long-term forecasts more difficult, which will also have an impact on the performance of the Canadian dollar in the foreign exchange market.

Overall, the current foreign exchange market is affected by the interweaving of multiple factors, and the trends of each currency pair are full of uncertainty. Investors need to closely track the above news trends, avatradescn.combine their own risk tolerance and investment goals, and make trading decisions with caution.

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

Only the strong know how to fight; the weak are not qualified to fail, but are born to be conquered. Step up to learn the next article!