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

The following is a collection of positive and negative news that affects the foreign exchange market on April 25, 2025:

Federal officials send out a signal of interest rate cuts: Federal Reserve Director Waller said that if the Trump administration re-implements high tariffs, companies may start laying off employees, and he will support interest rate cuts to protect the job market. This speech drove the market's expectation of interest rate cuts, causing US Treasury yields to fall and the US dollar index to fall, which is a positive for non-US currencies. Affected by this, at the end of New York on April 24, the euro rose 0.66% against the US dollar to 1.1390, the pound rose 0.65% against the US dollar to 1.3340, the Australian dollar rose 0.80% against the US dollar to 0.6410, and the US dollar fell 0.57% against the Japanese yen to 142.6345, etc.

The central bank increases liquidity support: The People's Bank of China announced that on April 25, it will conduct 600 billion yuan of MLF operations in fixed quantity, interest rate bidding, and multiple price winning bids, with a term of one year. This month, 100 billion yuan of MLF expired, and this operation achieved a net injection of 500 billion yuan, indicating that the central bank continued to increase liquidity support at the current stage and stabilize market expectations. This helps maintain the stability of the RMB exchange rate and to a certain extent enhances the market's confidence in the RMB.

Inflows in Japan increase: The total amount of overseas inflows attracted by Japanese bonds and stocks will hit a record-high single-month record, further indicating that global funds are looking for alternatives to U.S. assets. This may increase the demand for the yen and provide some support for the yen exchange rate.

Bad news

U.S. trade policy uncertainty: U.S. trade policy uncertainty still exists, and the Trump administration mayRe-implement trade protectionist measures such as high tariffs. Although the relevant policies have not been implemented yet, this uncertainty will have a negative impact on the global economic and trade order, and in turn affect the stability of the foreign exchange market. The market is concerned that intensifying trade frictions may lead to a global economic slowdown, a decline in risk appetite, and flow of funds to safe-haven assets, which puts pressure on risky currencies.

U.S. economic data is poor: U.S. second-hand home sales in March hit the biggest drop since 2022. As home buyers continue to be suppressed by the double suppression of high mortgage interest rates and high housing prices, second-hand home transaction volume fell by 5.9% to an annual rate of 4.02 million units, lower than most economists' expectations. The median selling price of second-hand houses rose 2.7% year-on-year to US$403,700, the highest record in March. Real estate market data is one of the important indicators of the economy. The poor data may imply that the US economic growth is under certain pressure and has a certain drag on the US dollar exchange rate.

Global Trade Tensions: The central bank governor of South Africa, the rotating chairman of the G20 (G-20), said global trade tensions have become "so serious". The G20 meeting did not issue a formal communiqué, which also highlighted the challenges facing global trade cooperation. The intensification of trade tensions may lead to a slowdown in global economic growth, affecting the exchange rate trends of currencies in various countries, declining market risk appetite, and funds tend to flow to safe-haven currencies.

Overall, on April 25, the foreign exchange market was affected by a combination of various factors. Factors such as the Federal Reserve's expectation of interest rate cuts and central bank liquidity support have a positive effect on non-US currencies. The uncertainty of US trade policy, poor economic data, and global trade tensions have brought certain pressure and uncertainty to the foreign exchange market. Investors need to pay close attention to the subsequent development of these news in order to make reasonable investment decisions.

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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