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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "[Aihua 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:
At a time when the global economy is closely linked, the foreign exchange market is affected by many factors, and daily news updates may change the long-short pattern of the market and bring new opportunities and challenges to investors. On July 11, based on various news, the foreign exchange market is in a www.avaforexcn.complex gaming environment.
1. Good news
(I) China's foreign exchange reserves have increased, and its holdings of gold has been continuously increased. Data released by the State Administration of Foreign Exchange on July 7 showed that as of the end of June 2025, China's foreign exchange reserves were US$3317.4 billion, up US$32.2 billion from the end of May, an increase of 0.98%. It has once again stood above US$3.3 trillion since the end of September 2024, and has remained above US$3.2 trillion for 19 consecutive months. At the same time, China's official gold reserves were 73.9 million ounces at the end of June, an increase of 70,000 ounces from the end of last month. The central bank has increased its holdings of gold for eight consecutive months. The increase in the scale of foreign exchange reserves reflects that China's economy has strong stability and risk resistance in global economic fluctuations, which has a positive effect on stabilizing the RMB exchange rate expectations. The large amount of foreign exchange reserves provide solid support for the RMB exchange rate. When facing external shocks, the central bank has more resources to maintain exchange rate stability. Continuously increasing holdings of gold will not only help optimize the structure of foreign exchange reserves, but also in the context of global geopolitical instability and damage to the credit of the US dollar, the safe-haven attributes of gold can also add guarantees to the security of national assets, further enhance the attractiveness of RMB assets in the international market, attract more foreign capital inflows, and indirectly promote the performance of RMB in the foreign exchange market. (II) Reforms in the foreign exchange field continue to advance, and facilitation policies are frequently introduced
The State Administration of Foreign Exchange actively promotes deep-seated reforms and high-level opening-up in the foreign exchange field in 2025, and introduces a series of facilitation policies. In terms of supporting the development of foreign trade enterprises, we will further deepen the reform of trade foreign exchange business management, expand the pilot program of high-level opening up of cross-border trade, and encourage banks to include more new trade business entities into trade facilitation policies, etc., which will help improve the efficiency of capital use and business processing of foreign trade enterprises and promote innovative trade development. 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 integrating domestic and foreign currencies of multinational www.avaforexcn.companies will be promoted, and funds management of overseas listing of domestic enterprises will be improved, and a new batch of qualified domestic institutional investors (QDII) investment quotas will be issued. These policies have been synergistically mobilized to stimulate market vitality, attract more international capital to flow into the Chinese market, promote international cooperation, and promote the use of the RMB in cross-border trade and investment, enhance the RMB's activity and influence in the foreign exchange market, and enhance its position in the international monetary system.
2. Bad news
(I) The scale of hidden debt of the US dollar is huge, threatening global financial stability
According to the Nikkei website on July 2, the Bank for International Settlements issued a warning on the super high "hidden debt" of the US dollar. As of the end of 2024, the total global hidden debt of the US dollar has reached 98 trillion US dollars, mainly raising US dollars through financial derivatives of "currency swaps", and most of them are short-term products with a maturity of less than one year. Since it is not included in the balance sheet, once an impact event occurs, financial institutions may be forced to obtain US dollars or sell US dollar-denominated assets to repay debts, resulting in worsening financial conditions. This uncertainty affects market confidence in US dollar assets, and investors may reduce their holdings in the US dollar and turn to other relatively safe currency assets, thereby suppressing the demand of the US dollar in the foreign exchange market and driving the US dollar to depreciate. Moreover, it is difficult for the market to predict which countries and regions will experience a shortage of US dollars and the degree of shortage. Central banks of various countries may be forced to act in an uncertain situation, further aggravate the turmoil in the financial market and interfere with the normal order of the foreign exchange market.
(II����� Group��) U.S. economic policy uncertainty curbs the global economy and affects foreign exchange market demand
The uncertainty of the Trump administration's recent tariff policy has disrupted global supply chains, triggered market concerns about global trade and economic growth, and suppressed energy consumption demand. As the world's largest economy and major currency issuancer, the United States' economic policy instability has cast a shadow on the prospects for global economic growth. Against the backdrop of global economic integration, slowing economic growth will reduce international trade exchanges and reduce demand for foreign exchange. For example, enterprises reduce cross-border investment and trade settlement due to trade obstacles.This reduces the demand for major currencies such as the US dollar. At the same time, economic uncertainty has increased the market risk aversion sentiment, and investors may prefer to hold safe-haven assets such as gold rather than currency assets. This has a negative impact on the liquidity and demand of the money market, resulting in a decline in foreign exchange market trading activity and affecting the stability of currency exchange rates in various countries, especially currencies closely related to the US economy, which may face greater depreciation pressure.
Total view, on July 11, the foreign exchange market was intermixed with positive and negative news, and the bulls and bears were fiercely fighting. Investors need to pay close attention to the follow-up developments of these news and the policy trends of central banks in order to make informed decisions in the www.avaforexcn.complex foreign exchange market.
The above content is all about "[Aihua Foreign Exchange Decision Analysis]: Collection of Positive and Negative News that Influences 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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