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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:
At a time when the global economy is closely linked, the foreign exchange market is affected by many factors, and the daily news is www.wzhdjgj.complicated. On July 1, 2025, investors need to pay attention to the following important positive news and negative news that affect the foreign exchange market to provide reference for investment decisions.
The core PCE price index of the United States rose 2.7% year-on-year in May, higher than the market expectations of 2.6%. This data, as one of the inflation indicators that the Federal Reserve is most concerned about, strengthens market concerns about inflation stickiness. The high inflation may lead to the Federal Reserve postponement of interest rate cuts. The market's expectations for the Federal Reserve to cut interest rates in the near future to stimulate the economy have cooled down. For the US dollar, weaker expectations of interest rate cuts will reduce its asset attractiveness, suppress the trend of the US dollar index, and thus affect the exchange rate of the US dollar against other major currencies. For example, if the expected rate cut is delayed, the yield advantage of US dollar assets is relatively weak, and investors may turn their funds to other currency assets, driving the US dollar to depreciate.
The final value of the manufacturing PMI in the euro zone in June was 46.5, lower than the previous value of 47.8 and the market expectation of 47.5. The data shows that the eurozone manufacturing industry continues to shrink and economic growth momentum is insufficient. Manufacturing, an important part of the euro zone economy, has exacerbated market concerns about the euro zone's economic outlook. Sluggish economic growth may prompt the ECB to adopt a looser monetary policy to stimulate the economy, which will put downward pressure on the euro. In the past, if the European Central Bank increases monetary easing, once it increases monetary easing, it is necessary for the European Central Bank to increase monetary easing.With strength, the euro often faces pressure of depreciation, and investors' confidence in euro assets will also be impacted.
On June 23, under the mediation of US President Trump, Israel and Iran reached a ceasefire agreement. The easing of the situation in the Middle East has greatly alleviated market concerns about disruption in oil supply and reduced the geopolitical risk premium. This has led to a rebound in investors' risk appetite, and funds flow out of safe-haven assets such as the US dollar, the Japanese yen, etc., and then flow into risky currencies such as the Australian dollar, the New Zealand dollar, etc. For example, after the news of the ceasefire came out, the Australian dollar exchange rate against the US dollar rose to a certain extent, as the market expected that the global economic environment would stabilize due to the easing of the situation in the Middle East. As a resource-exporting country, Australia's economy is expected to benefit, thereby pushing the Australian dollar to strengthen.
Amid the impact of US tariffs, Japan's exports in May fell 1.7% year-on-year, the first decline in eight months. At the same time, Japan's trade deficit in May was 637.6 billion yen, which was the second consecutive month of deficit. As an export-oriented country, Japan's decline in exports and widening trade deficit have intensified market concerns that Japan's economy may shrink again in the second quarter and fall into a technical recession. The increased uncertainty of the economic outlook has led to the decline in the attractiveness of the yen assets, which has a negative impact on the yen exchange rate. In addition, the Bank of Japan's monetary policy outlook has also become more unpredictable due to tariff shocks and economic situation, further increasing the uncertainty of the yen trend. Investors may reduce their holdings in yen assets, causing the yen to depreciate.
The State Administration of Foreign Exchange publicly solicited opinions from the public on the "Notice of the State Administration of Foreign Exchange on Deepening the Reform of Foreign Exchange Management of Cross-border Investment and Financing (Draft for www.wzhdjgj.comments)" on June 18. This reform policy mainly includes 9 specific policies, including the investment side, the financing side and payment convenience, such as canceling the registration of basic www.wzhdjgj.comrmation on the preliminary expenses of domestic direct investment, increasing the facilitation limit of foreign debts of some enterprises, etc. These reform measures aim to further facilitate business entities to carry out cross-border investment and financing activities and optimize the business environment. For the RMB, the promotion of policies will help improve the use of RMB in cross-border investment and financing, enhance the attractiveness of RMB assets, promote the internationalization of RMB, and form positive support for the RMB exchange rate in the long run.
The Federal Reserve has differences within the time and amplitude of interest rate cuts. Atlanta Fed Chairman Bostic said that interest rate cuts may be delayed, stressing that the impact of tariffs on inflation needs to be observed; while Vice Chairman Bauman said that if inflation continues to decline, it may support interest rate cuts as early as July. This inconsistency in internal opinions has made the market's expectations of the direction of the Federal Reserve's monetary policy more impressivepaste. The trend of the US dollar depends to a large extent on the Federal Reserve's monetary policy. The uncertainty of policy expectations has led to more cautious investors' investment decisions on US dollar assets and intensified volatility in the US dollar index. If the Fed fails to clarify the path to cut interest rates in the future, the US dollar may maintain a volatile trend for a period of time, making it difficult to form a clear upward or downward trend.
The foreign exchange market is changing rapidly. Investors need to pay close attention to various news trends, www.wzhdjgj.comprehensively analyze their impact on different currencies, and make investment decisions with caution.
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 www.wzhdjgj.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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