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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Aihua Ava 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 foreign exchange market, changes in the news are often an important driving force for market fluctuations. For investors, accurately grasping positive and negative news is the key to formulating a trading strategy. The following is a summary of important news that affects the foreign exchange market on June 27, 2025.
The geopolitical situation eases, and the rebound in risk appetite is good for non-US currencies
U.S. President Trump announced on the evening of June 23, Eastern Time that Israel and Iran have reached an agreement on a "full and www.avaforexcn.complete ceasefire." This news quickly triggered a chain reaction in the foreign exchange market. The phased easing of geopolitical conflicts has led to a significant rebound in market risk preference. Funds flow out of traditional safe-haven assets such as the US dollar and transferred to non-US currencies. The euro performed well against this background, and the exchange rate against the US dollar continued to rise. On June 24, the euro broke through the 1.16 mark again, with a high of 1.1641, setting a new high since October 2021. This trend reflects the improvement in the eurozone economic outlook expectations after the market alleviates geopolitical risks. Similarly, non-US currencies such as the British pound have also been boosted to a certain extent, showing a relatively strong attitude in the foreign exchange market.
Economic data is differentiated, and euro zone data supports the euro upward
European economic data has shown certain resilience in recent years. Taking Germany as an example, the business prosperity index of the Munich Institute of Economic Research in Germany rose to 88.4 in June, hitting a record high in the past year. Clemens, director of the Munich Institute for Economic Research? Fist said "Germany's economy is slowly recovering confidence." Good economic data provides solid fundamental support for the euro. From a macro perspective, the improvement of the euro zone economic data has strengthened investors' confidence in euro assets, attracted capital to flow into the euro zone, and pushed the euro against the dollar higher. In contrast, the economic data of some countries is lower than expected. For example, Japan's real GDP in the first quarter of 2025 fell by 0.2% month-on-month and 0.7% year-on-year, and negative growth again occurred after a year. The differentiation of economic data in the foreign exchange market is reflected in the difference in currency strength. The euro benefited from the improvement of economic data in the region and gained an advantage in the www.avaforexcn.competition in the foreign exchange market.
The central bank has different monetary policies, and the US dollar is under pressure and downward
In terms of monetary policy, the attitudes and decisions of major central banks around the world have far-reaching impact on the exchange rate. The European Central Bank lowered the three key euro zone interest rates by 25 basis points at the beginning of this month, and Governor Lagarde said the interest rate cut cycle is www.avaforexcn.coming to an end. This relatively stable monetary policy expectation provides support for the euro. There are serious differences within the Federal Reserve on the timing and pace of interest rate cuts. Federal Reserve Chairman Powell emphasized at a Senate hearing on June 25 that the impact of excessive tariff rates is difficult to assess, and the economy and employment market are still strong. Before responding to the Trump administration's interest rate cut, it takes more time to observe the impact of tariffs on domestic inflation in the United States. At present, there is no need to rush to cut interest rates. However, Vice Chairman Bowman said that if U.S. inflation continues to decline or the job market weakens, the Federal Open Market www.avaforexcn.committee can cut interest rates as early as July. This inconsistency in internal opinions has made the market unpredictable about the future direction of the Federal Reserve's monetary policy, greatly suppressing the US dollar. Since the beginning of this year, the US dollar has been weak, and the US dollar index has closed down for three consecutive trading days, with a cumulative decline of about 9.6%, which is very likely to hit the worst first half since 1986.
China's foreign exchange policy is favorable, and the RMB exchange rate is resilient
The State Administration of Foreign Exchange has recently launched a series of favorable policies. In terms of supporting the development of foreign trade enterprises, we will further deepen the reform of trade foreign exchange business management, implement a pilot program to expand the high-level opening up of cross-border trade, and encourage banks to include more new trade business entities into trade facilitation policies. This will help improve the efficiency of capital use and business processing of foreign trade enterprises, expand the scale of business, promote trade development, and thus support the RMB exchange rate. In terms of facilitation of cross-border investment and financing, policies such as supporting scientific research institutions to attract and utilize foreign capital and expand cross-border financing convenience for technology-based enterprises will be implemented nationwide; policies such as promoting integrated domestic and foreign currency fund pool policies for multinational corporations can be facilitated to collect and use multinational corporations group funds; improving the management of overseas listing funds of domestic enterprises, unifying the management policies of foreign currency, facilitating the transfer of funds raised back to domestic use, and a new batch of qualified domestic institutional investors (QDII) investment quotas will be issued. These policies work together to demonstrate China's firm determination to continue to expand its opening up to the outside world and enhance the market's efforts to the peopleConfidence in currency assets. On June 24, the RMB exchange rate mid-price rose sharply by 54 basis points, and the onshore and offshore RMB exchange rates against the US dollar also appreciated for days, returning to above the 7.18 mark.
Global trade protectionism is rising, and risk aversion is disturbing the foreign exchange market
Although the geopolitical situation has eased, the trend of global trade protectionism is still continuing. Data shows that the number of global discriminatory trade barriers surged to more than 1,200 in 2024, and global cross-border investment has grown negatively for three consecutive years since 2022. At the 2025 Summer Davos Forum held on June 24-26, delegates from all countries generally believed that the wave of protectionism was causing a serious impact on the global economy. The intensification of trade protectionism has increased uncertainty in the global economy and triggered fluctuations in market risk aversion. In the foreign exchange market, this risk aversion sentiment changes the flow of funds, and investors tend to hold safe-haven currencies. For example, the Japanese yen is supported by the increase in safe-haven demand in certain periods; at the same time, the demand for risky assets has decreased accordingly, and some emerging market currencies are under pressure. This risk aversion caused by trade protectionism has become an important factor in the instability of the foreign exchange market and interferes with the normal fluctuations in the exchange rate.
In general, the current foreign exchange market is affected by the interweaving of various factors such as geopolitics, economic data, central bank monetary policy, and trade policy. During the trading process, investors need to pay close attention to these news trends and adjust their investment strategies in a timely manner to cope with the www.avaforexcn.complexity and change of the foreign exchange market.
The above content is all about "【Ava Ava Foreign Exchange Decision Analysis】: Collection of Positive and Negative News that Influence the Foreign Exchange Market". It was carefully www.avaforexcn.compiled and edited by the Avatrade Foreign Exchange Editor. I hope it will be helpful to your trading! Thanks for the support!
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