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Hello everyone, today XM Foreign Exchange will bring you "【XM Foreign Exchange 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:
Positive aspects: There is no obvious major positive news. However, there is certain uncertainty in the market's expectations for the direction of the Federal Reserve's monetary policy. Although CME's "Feder Observation" shows that the probability of maintaining interest rates unchanged in May is 96.8%, the probability of interest rate cuts in June is 36.7%. This uncertainty has given the US dollar a certain supporting factor at the market expectations level, because changes in interest rate policies have an important impact on the US dollar exchange rate. If the Fed's expectation of a rate cut weakens in the future, the dollar may strengthen.
Badministrative aspects: There are some hidden concerns in the US economic data, which may put some pressure on the US dollar. For example, before the non-farm employment report was released, the US dollar index was testing the 100 mark, showing the market's cautious attitude towards the US dollar trend. In addition, US President Trump authorized 100% tariffs on foreign-made films, a trade protectionist move that may cause concerns in the international market and in turn affect the stability of the dollar.
Favorite: The HICP data in the euro zone exceeded expectations in April, which pushed the euro against the US dollar to rise, making the euro perform relatively strongly in the foreign exchange market. The ECB recently suggested a possible slowdown in rate cuts, which strengthened market confidence in the euro and pushed the euro to a three-month high.
Bad negative: There is no obvious major negative news. However, the overall economic recovery of the eurozone still faces some challenges, such as the imbalance in economic development among member states, and these long-term factors may be to a certain extentLimit the upside of the euro.
Favorite: There are no obvious positive factors. The yen performed relatively weakly in 2025, with the exchange rate against the RMB depreciating by nearly 3% from the beginning of the year. The Bank of Japan adheres to a loose monetary policy strategy and maintains interest rates at a low level, which to some extent weakens the attractiveness of the yen.
Bearnings: The Bank of Japan announced at its monetary policy meeting on May 1 that it would maintain its short-term policy interest rate target at 0.5%, and lowered its economic growth forecast for fiscal 2025 and fiscal 2026, which made the market more pessimistic about the outlook for the yen and was not conducive to the strengthening of the yen exchange rate.
Favorites: From the perspective of the domestic economic situation, the manufacturing PMI has recently returned to the expansion range, and export data has recovered, showing the strong vitality of the domestic economy and providing strong support for the RMB exchange rate. The stable development of the domestic economy has made international investors full of confidence in RMB assets, attracted more capital inflows, and promoted the stability of the RMB exchange rate.
Bad negative: The RMB exchange rate trend faces external challenges, and the uncertainty of the direction of the Federal Reserve's monetary policy puts certain pressure on the RMB exchange rate against the US dollar. If the Fed's expectation of interest rate hikes increases, the US dollar may strengthen and the RMB exchange rate against the US dollar will be under pressure to depreciate. At the same time, the impact of global geopolitical changes cannot be ignored. Such as trade frictions and geopolitical conflicts, which will interfere with the global economic order and affect the stability of the RMB exchange rate.
GBP: UK service industry data exceeded expectations, driving the GBP exchange rate against the RMB by 0.7% compared with last week, which is a positive factor for the GBP. But the Bank of England's dovish bets escalate, which may put some pressure on the long-term trend of the pound.
Australia dollar: The prices of international commodities fluctuate, causing the exchange rates of currencies in resource countries such as the Australian dollar to fluctuate greatly. Economic data such as the final value of the SPGI service industry in April and the final value of the comprehensive PMI have a certain impact on the Australian dollar, but overall the trend of the Australian dollar is more significantly affected by commodity prices and global economic demand.
Canadian dollar: Canada's SPGI comprehensive PMI was 46.6 in May, indicating that the economy may face certain downward pressure, which has a certain negative impact on the Canadian dollar. In addition, fluctuations in international commodity prices will also have an impact on the Canadian dollar exchange rate, because Canada is a resource exporter.
The above content is all about "【XM Forex Official Website】: Collection of Positive and Negative News that Influence the Foreign Exchange Market". It was carefully compiled and edited by the XM Forex editor. I hope it will be helpful to your trading! Thanks for the support!
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