A collection of positive and negative news that affects the foreign exchange market

In the foreign exchange market, various news always affects the trend of the currency. Investors need to pay close attention to the latest developments in order to seize investment opportunities and avoid risks. The following is a review of the positive and negative news that affected the foreign exchange market on May 29, 2025.

1. Economic data and central bank policy

(I) The United States

On Wednesday local time, the Federal Reserve released the minutes of the May monetary policy meeting on its official website. Fed officials believe they may face difficult choices in the www.avaforexcn.coming months, with inflation and unemployment risks rising and ready to wait for the prospects to become clearer, according to the minutes. Several officials issued an alert on financial market behavior in April, emphasizing that "volatility intensifies" in each asset class. This uncertainty puts some pressure on the US dollar trend. However, BNPParibas Markets 360 analysts said that if the money market ruled out the possibility of the Fed's interest rate cut this year, the yield on the U.S. two-year Treasury bonds is expected to rise in the www.avaforexcn.coming months. The current two-year Treasury bond yield is 3.949%, up 3 basis points from the previous day. If the yield on treasury bonds rises, it will attract capital inflows to a certain extent and support the US dollar.

(II) European

European government bond yields rose slightly on the 28th, ending the four consecutive days of downward trend, and investors were waiting for the progress of tariff issues. Germany's 10-year government bond yield (eurozone benchmark) rose 2 basis points to 2.55%. The market expects the probability of the ECB cutting interest rates by 25 basis points next week is 90%, and the deposit rate is expected to be 1.70% in December. Phillip, chief economist at the European Central Bank? Ryan said although most factors point to the continued inflation in the euro zoneDecline, but the risk of failure of EU-US trade negotiations could push up inflation. At the same time, Germany's unemployment rose faster than expected in May, but Kasten, head of ING's global macroeconomics? Brzeski said the labor market showed signs of bottoming out. Overall, European economic data and central bank policy expectations are relatively www.avaforexcn.complex, and the impact on the euro is intertwined with bulls and bears.

(III) Other countries and regions

The Bank of New Zealand lowered its policy interest rate from 3.50% to 3.25% on the 28th, which is the sixth consecutive rate cut, which is in line with market expectations. Its cash interest rate forecast shows that it will cut interest rates by at least another 25 basis points. This puts the New Zealand dollar under downward pressure. On the Japanese side, the April trade data released on the 29th will attract attention. Previously, Bank of Japan Governor Kazuo Ueda said he would continue to raise interest rates based on economic and price conditions, beware of the impact of food prices on potential inflation, which has some support for the yen. However, the Japanese government bond market has fluctuated significantly recently, and the Bank of Japan's long-term government bond holdings have declined for the first time in 16 years, which also brought uncertainty to the trend of the yen.

2. Geopolitics and trade relations

(I) US-EU trade negotiations

U.S. President Trump said that the EU is proactive in launching trade negotiations, but reiterated that if an agreement cannot be reached, terms of trade will be imposed. The EU's chief trade negotiator said it had a "good call" with Trump administration officials and the EU was "fully www.avaforexcn.committed to" reaching a trade deal by the July 9 deadline. Trump has previously agreed to postpone the 50% tariff on European goods. The progress of US-European trade negotiations affects the market's nerves. If the negotiations successfully reach an agreement, it will boost market risk appetite and benefit currencies such as the euro; on the contrary, if the negotiations break down, it may trigger market risk aversion sentiment, and the US dollar may be supported by risk aversion demand.

(II) U.S.-Iran relations

U.S. President Trump said he has warned Israeli Prime Minister Netanyahu not to launch a military strike against Iran to avoid disrupting diplomatic negotiations on Tehran's nuclear program, and the U.S.-Iran nuclear agreement may be reached soon. Changes in the situation in the Middle East are significantly affected by the foreign exchange market. If the U.S.-Iran relations ease, it will reduce geopolitical risks and reduce market risk aversion sentiment, which will be detrimental to safe-haven currencies such as the Japanese yen and Swiss francs, and risky currencies may benefit.

(III) Other geopolitical dynamics

Global geopolitical tensions remain. Although geopolitical hot issues such as the Russian-Ukrainian conflict have not made any major new progress, potential risks still affect market sentiment, allowing investors to remain cautious in asset allocation and foreign exchange transactions, and have an impact on the demand for currencies and safe-haven currencies in relevant regions.

III. Market dynamics and institutional views

(I) Stock market and www.avaforexcn.commodity market

The three major U.S. stock indexes closed down on the 28th, with the Dow falling 0.58%, the Nasdaq fell 0.51%, the S&P fell 0.56%, most popular technology stocks fell, Tesla fell more than 1%, most popular Chinese stocks closed lower, and iQiyi fell more than 4%. The performance of the stock market affects the market's risk preference, which in turn has a conductive effect on the foreign exchange market. When the risk preference decreases, funds tend to flow into safe-haven assets, such as the US dollar, the Japanese yen, etc. International oil prices rose by more than 1% on the 28th, and WTI crude oil futures closed at US$61.84 per barrel, an increase of 1.56%. Oil price fluctuations will affect www.avaforexcn.commodity currencies, such as the Canadian dollar, Australian dollar, etc. The rise in oil prices will support these www.avaforexcn.commodity currencies.

(II) Institutional Views

Standard Chartered states that what if US President Donald? Trump's policies have exacerbated the U.S. debt burden but failed to boost the economy, so the risk of a "sharp" decline in the U.S. dollar will rise next year. Goldman Sachs expects OPEC+ to maintain crude oil production after the decision to increase production in July. The institutional view reflects the market's expectations for economic and currency trends, affects investor decision-making, and thus affects the flow of funds in the foreign exchange market and the money supply and demand relationship.

To sum up, on May 29, 2025, the foreign exchange market was affected by a variety of factors, and long and short news such as economic data, central bank policies, geopolitics and market dynamics were intertwined. Investors need to pay close attention to changes in these factors, www.avaforexcn.comprehensively analyze and judge, and formulate reasonable investment strategies.

The above content is all about "【Ava Aihua Foreign Exchange Platform】: Collection of positive and negative news that affects the foreign exchange market". It was carefully www.avaforexcn.compiled and edited by Aihua Avatrade Foreign Exchange Editor. I hope it will be helpful to your trading! Thanks for the support!

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