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Hello everyone, today XM Foreign Exchange will bring you "【XM Foreign Exchange Market Analysis】: 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:
Good news: The US ISM service industry index unexpectedly accelerated its expansion. The improvement in this data caused the US stock and US dollar index to narrow the decline, and the US Treasury yield rose, hitting a new high in more than a week. This shows that the strong development of the US service industry has enhanced the market's confidence in the US dollar to a certain extent and has a positive support for the US dollar exchange rate. From the perspective of interest rates, the probability of the Federal Reserve keeping interest rates unchanged in May is 97.3%. Higher interest rate expectations make US dollar assets relatively more attractive, attracting international capital inflows, and thus pushing the US dollar to strengthen.
Bad news: Tariff threats are overwhelming. Ford Motor Company said that Trump's tariff policy will cause the company to lose $1.5 billion in profits this year, and may also lead to interruption of automobile production in the entire industry, which has triggered market concerns about the US economy, which may in turn put some pressure on the US dollar. In addition, although the probability of the Federal Reserve maintaining interest rates is high, the market still has uncertainty about its future monetary policy direction. If economic indicators such as inflation data change in the future, it may trigger market expectations for the Federal Reserve's monetary policy adjustments, thereby affecting the trend of the US dollar.
Good news: China's manufacturing PMI has stood on the boom and bust line for three consecutive months, and exports have recovered, which shows the resilience and positive trend of China's economy, providing solid fundamental support for the RMB. At the same time, the offshore RMB rose by more than 300 points during the session and broke through 7.19, setting a new five-month high, indicating that the demand for RMB in overseas markets has increased, and the RMB exchange rate hasA certain motivation for appreciation.
Bad news: In terms of geopolitical aspects, geopolitical risks such as the Taiwan Strait still exist. If tensions escalate, they may trigger risk aversion in the market and lead to significant fluctuations in the offshore RMB exchange rate. However, the central bank can now fine-tune the intermediate price through countercyclical factors and other tools to stabilize the RMB exchange rate and reduce the risk of unilateral depreciation or excessive fluctuation.
Good news: The euro zone HICP (reconciliation consumer price index) exceeded expectations, which showed that the inflation level in the euro zone has increased, which to a certain extent enhanced the market's confidence in the euro zone economy and pushed the euro against the dollar to rise. The recovery of manufacturing in the euro zone also provided support for the euro, and economic growth made the euro more attractive in the foreign exchange market.
Bold news: Although there are signs of recovery in the euro zone economy, high inflation pressure still exists, which may have a certain inhibitory effect on the economic growth of the euro zone and also bring challenges to the European Central Bank's monetary policy. If inflation continues to be high, the ECB may need to adopt a tighter monetary policy to curb inflation, which could adversely affect the euro zone's economy and the euro exchange rate.
Good news: The expansion of the UK service industry exceeded expectations and became the main factor driving the pound to hit a new high this year. The good performance of the service industry shows the vitality of the UK economy, strengthens market confidence in the pound, attracts investors' demand for pound assets, and drives the pound exchange rate to strengthen.
Bold news: The BoE dovish bets have been upgraded, and the market expects the BoE to adopt a relatively loose monetary policy, which is in a certain contrast with the strong performance of the pound. If the Bank of England lowers its key interest rates, it may lower the yield on pound assets, thus putting downward pressure on the pound exchange rate.
Bad news: Affected by the pullback in commodity prices, resource-based currencies such as the Canadian dollar and the Australian dollar have performed weakly recently. Crude oil prices fell sharply due to factors such as OPEC+ production increase. As an important commodity, the decline in crude oil prices has put a lot of pressure on resource-based currencies such as the Canadian dollar. In addition, the global economic growth has slowed down and the demand for resources has decreased, which is not conducive to currencies such as the Canadian dollar and the Australian dollar.
The above content is compiled from public information and is for reference only. The foreign exchange market is complex and changeable. When making trading decisions, investors need to consider a variety of factors and combine technical analysis and other methods to make cautious judgments.
The above content is all about "【XM Foreign Exchange Market Analysis】: Collection of Positive and Negative News that Influence the Foreign Exchange Market". It was carefully compiled and edited by the XM Foreign Exchange editor. I hope it will be helpful to your trading! Thanks for the support!
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