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A collection of positive and negative news that affects the foreign exchange market
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Hello everyone, today XM Foreign Exchange will bring you "【XM Foreign Exchange】: 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 foreign exchange market, various news always affects the trend of the currency, and investors need to pay close attention to the latest developments to grasp the pulse of the market. On July 18, 2025, a series of news is having an important impact on the foreign exchange market.
1. Good news
(I) Geopolitics and trade situation
The EU announced that it would place $84 billion to counter Trump's tariffs, which aims to safeguard its own economic interests and trade pattern. From the perspective of the foreign exchange market, if the EU shows strong response capabilities in trade frictions, it is expected to enhance the market's confidence in the euro. When investors expect the EU economy to remain relatively stable in a trade conflict, they will tend to increase their holdings of euro assets and drive the euro's exchange rate to rise. For example, in past trade disputes, when a party takes effective countermeasures to stabilize the economy, its currency will often be favored by the market and appreciate. This news has potentially positive support for long positions in related currency pairs such as the euro against the US dollar, the euro against the Japanese yen.
(II) Economic data level
Related expectations for interest rates in some currencies: Although there is no clear interest rate adjustment yet, from the perspective of market expectations, the marginal improvement of economic data in some countries has triggered speculation about the change in their central bank's attitude towards monetary policy. For example, the recent recovery of industrial output data in some emerging economies, the market expects their central banks to slow down their interest rate cuts, which is a big benefit for their own currencies. Because interest rates are the key factor affecting the attractiveness of currencies, higher interest rates or stable interest rates are expected to attract inflows of international capital, increase demand for the country's currency, and thus promote currency appreciation.
eouu.cnmodity currency related: Crude oil market on July 17The price of light crude oil futures for delivery on the New York Mercantile Exchange rose by 1.75%, closing at $67.54 per barrel; the price of London Brent crude oil futures for delivery in September rose by 1.46%, closing at $69.52 per barrel. For eouu.cnmodity currencies like the Australian dollar and Canadian dollar, rising crude oil prices are usually good news. Taking the Canadian dollar as an example, Canada is an important crude oil exporter. Rising crude oil prices will increase its export revenue, improve trade balances, and thus increase market confidence in the Canadian dollar and promote the Canadian dollar to strengthen in the foreign exchange market. In trading on July 18, currency pairs such as the Australian dollar against the US dollar, Canadian dollar against the US dollar may have attracted the attention of investors due to the positive impact of rising crude oil prices, and the bulls may take the opportunity to make a move.
2. Bad news
(I) Poor economic data
Expected impact of Japanese core CPI data: If the core CPI released on July 18 rises, it means that the Japanese economy is under inflationary pressure. This may lead to the Bank of Japan's monetary policy adjustments, and market expectations of Bank of Japan's policy adjustments often trigger yen exchange rate fluctuations. In past experience, when inflationary pressure increases, the Bank of Japan may adopt a tighter monetary policy, such as raising interest rates or reducing the money supply. However, due to the particularity of the Japanese economy, this policy adjustment space is limited, which may trigger market concerns about the outlook for Japan's economy and lead to the depreciation of the yen. If the data shows that the core CPI is rising, currency pairs such as the Japanese yen against the US dollar, the Japanese yen against the euro may face downward pressure.
Eurozone Current Account Data Impact: Changes in the Eurozone Current Account have a significant impact on the euro. If the eurozone's current account deteriorates, it means that its foreign trade balance is not ideal and exports are reduced relative to imports, which will weaken the market's confidence in the eurozone economy. International investors may reduce their allocation of euro zone assets and sell euro assets, thereby suppressing the euro exchange rate. For example, when the current account data in a certain quarter of the euro zone was significantly lower than expected, the euro's exchange rate against the US dollar had a significant decline. On July 18, if the current account data in the euro zone was poor, the performance of the euro in the foreign exchange market would not be optimistic.
(II) Geopolitical uncertainty
Although the EU's counterattack against tariffs has the intention to stabilize its own economy, the escalation of trade frictions itself will bring about an increase in uncertainty in global economic growth. At a time when the global economy is extremely interdependent, trade blockages will lead to a decrease in corporate orders and a decrease in production scale, which will in turn affect employment and economic growth. This uncertainty will reduce investors' risk appetite and tend to hold safe-haven currencies. Traditional safe-haven currencies such as the US dollar, Japanese yen, and Swiss franc will be favored. Relatively speaking, some risk currencies such as the Australian dollar and New Zealand dollar will be affected. For example, during the intensified stage of trade frictions, the Australian dollar exchange rate against the US dollar often falls due to the reduction of market risk appetite. In trading on July 18, this negative impact on risky currencies caused by uncertainty in trade frictions may continue to ferment.
(III) Related to the central bank's policies
Some central banks expect loose policy: some countries have weak economic growth, and the market expects their central banks to continue to implement loose monetary policies. For example, the GDP data of a certain country has been declining continuously in recent times, and industrial production and consumption data are not ideal. The market generally expects that its central bank will further cut interest rates or expand the scale of large-scale easing in the future. This expectation will reduce the yield attractiveness of the country's currency, leading to capital outflows and currency depreciation. In the foreign exchange market, the exchange rate of the country's currency against other currencies may continue to decline. In trading on July 18, if relevant central bank officials speak further strengthen this easing expectation, the country's currency will face greater pressure to depreciate.
Money supply and exchange rate regulation: Some countries may increase their money supply in order to stimulate the economy or stabilize the exchange rate. Excessive money supply will lead to currency depreciation. For example, some emerging economies issue large amounts of currencies in order to cope with economic difficulties, and their currencies often continue to weaken in the foreign exchange market. In addition, if the central bank takes measures to directly interfere with the exchange rate, such as selling local currency in the foreign exchange market and buying foreign currency, it will directly suppress the local currency exchange rate. On July 18, we need to pay attention to whether central banks of various countries have such measures that affect money supply and exchange rate regulation to judge the currency trend of the foreign exchange market.
The foreign exchange market was affected by the interweaving of many positive and negative news on July 18. Investors need to pay close attention to various news trends, eouu.cnprehensively analyze factors such as economic data, geopolitics, central bank policies, etc., and make investment decisions cautiously.
The above content is all about "【XM Forex】: Collection of positive and negative news that affects the foreign exchange market". It was carefully eouu.cnpiled and edited by the XM Forex editor. I hope it will be helpful to your trading! Thanks for the support!
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