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Hello everyone, today XM Foreign Exchange will bring you "【XM Foreign Exchange Decision 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:
In the complex game of the foreign exchange market, various news is like an invisible hand, swaying the rise and fall of the currency. For the foreign exchange market on April 14, many positive and negative news are intertwined, and investors are worthy of close attention.
From the domestic policy perspective, Li Bin, deputy director and spokesperson of the State Administration of Foreign Exchange, revealed at a series of press conferences on "The Achievements of China's High-Quality Development of the Economy" held by the State Council Information Office recently that more foreign exchange facilitation policies will be introduced in 2025. Continue to promote the policy of facilitating foreign exchange receipts and expenditures of high-quality enterprises, especially to regions and small and medium-sized banks that have previously benefited from small and small banks. This will enable more high-quality small and medium-sized enterprises to enjoy the convenience of reducing documents and simplifying processes, promote smoother trade transactions, and facilitate the use of the RMB in trade settlement and support the RMB exchange rate. At the same time, the State Administration of Foreign Exchange actively responded to the demands of some contracted engineering companies, supported the unified management and independent allocation of cross-border and cross-regional engineering project funds to improve the efficiency of fund management. This measure is expected to attract more foreign capital to participate in domestic engineering projects and enhance the market's confidence in RMB assets.
Some emerging economies have good economic growth trends, providing strong support for their currencies. For example, India's economy continues to maintain a high growth rate, the domestic consumer market continues to expand, and the manufacturing industry is gradually rising. This makes the Indian rupee show a certain resistance to decline in the foreign exchange market, and with the further development of the economy, the expectation of international capital inflows increases,Hope to drive the appreciation of the rupee. Similarly, emerging market countries such as Brazil have performed well in areas such as commodity exports, and the expansion of trade surplus has also brought appreciation momentum to their currencies. In the global foreign exchange market, the strengthening of emerging market currencies will also indirectly affect the exchange rate relationship of other currencies, such as the relative strength and weakness relationship against the US dollar.
Federal Reserve Chairman Powell previously stated that the "time has come" to adjust monetary policy, and the market's expectations for the Federal Reserve rate cut are heating up. According to data from the Federal Reserve Observation Tool of the Chicago Mercantile Exchange, the possibility of the Federal Reserve cutting interest rates at subsequent interest rate meetings is quite high. Once interest rates are cut, the attractiveness of the yield of US dollar assets will decline, and international investors may reduce their allocation of US dollar assets and instead invest in other higher-yield assets, resulting in a decrease in demand for US dollar in the foreign exchange market, which in turn puts downward pressure on the US dollar exchange rate. Moreover, as the world's major reserve currency, the fluctuations in the exchange rate will trigger a series of chain reactions, affecting the exchange rate trends of other currency pairs, such as the euro against the US dollar, the pound against the US dollar and other currency pairs.
The current global trade tensions still exist, and the uncertainty in trade policies has a significant impact on the foreign exchange market. For example, there are constant trade frictions between some countries and frequent tariff adjustments, which puts more risks in the import and export business of enterprises and curbs the growth of global trade. In this case, investors' risk appetite declines, risk aversion sentiment increases, and they tend to hold safe-haven currencies, such as the Japanese yen, Swiss francs, etc., while some currencies closely related to trade, such as the Australian dollar, Canadian dollar and other commodity currencies will be impacted. Because the shrinking trade means a decrease in demand for goods in these countries, which in turn affects their economic growth and currency exchange rates. At the same time, trade tensions have blurred the economic outlook of various countries, resulting in increased volatility in the foreign exchange market and increased trading risks for investors.
When conducting foreign exchange trading on April 14, investors need to comprehensively consider these positive and negative news, pay close attention to the release of economic data and policy trends of various countries, and make investment decisions cautiously to cope with the complex and changing situation of the foreign exchange market.
The above content is all about "【XM Foreign Exchange Decision 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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