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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 Platform】: 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 is like changing times, always influencing the trend of the currency. For investors, accurately grasping these news has become the key to playing in the market. The following is a summary of important positive and negative news that affects the foreign exchange market on August 26, 2025.
1. Dollar related news
(I) The expectation of the Federal Reserve's interest rate cut has increased, and the US dollar may be under pressure
On August 22, local time, Federal Reserve Chairman Powell delivered a speech at the annual economic seminar held in Jackson Hall, Wyoming, hinting that despite the current upward risk of inflation, the Federal Reserve may still cut interest rates in the www.xmmen.coming months. This remark exacerbated the turmoil in the US financial market, with the US dollar index falling 0.94% on August 22, marking the largest single-day decline since April 2025. The market generally expects that the Federal Reserve will announce a 25 basis point cut at its interest rate meeting in September as soon as possible. If the Fed expects a rate cut, the US dollar may weaken further. Judging from historical experience, the Federal Reserve's interest rate cuts often reduce the yield attractiveness of US dollar assets, prompting funds to flow to other currency assets, thus putting downward pressure on the US dollar exchange rate. When the Fed opened a cycle of interest rate cuts in 2019, the U.S. dollar index continued to fall in the following months. At present, as Powell released a signal of interest rate cuts, investors are becoming more cautious about the future trend of the US dollar. Some funds have begun to deploy in advance, reduce their holdings of US dollar assets, and instead allocate other currencies, which undoubtedly brings great downward pressure to the US dollar.
(II) The hidden worries of US economic data have dragged down the outlook for the US dollar
Some of the US economic data recently released have performed poorly, casting a shadow on the US dollar trend. Although the initial value of the US GDP growth rate in the second quarter is OK, the number of consumer expendituresIt was lower than expected, indicating that the domestic consumption momentum in the United States has weakened. At the same time, the US manufacturing PMI data continues to be below the boom and bust line, indicating that the manufacturing industry is facing difficulties. Consumption, the main driver of U.S. economic growth, has weakened its momentum and weak manufacturing industry have caused the market to worry about the outlook for the U.S. economy. Economic fundamentals are an important support for currency exchange rates. The hidden concerns in US economic data have caused investors' confidence in the US dollar to decline, dragging down the prospects of the US dollar to a certain extent. If subsequent economic data cannot improve significantly, the US dollar may continue to be under pressure in the foreign exchange market.
2. RMB related news
(I) The intermediate price rose sharply, and the RMB exchange rate hit a stage high
On August 25, according to data disclosed by the China Foreign Exchange Trading Center, the RMB mid-price rose sharply by 160 basis points to 7.1161 yuan, a new high since November 2024. On the same day, the onshore RMB exchange rates against the US dollar and the offshore RMB against the US dollar both appreciated, and once recovered the 7.15 mark during the session, both hitting the appreciation highs in the past month. This is mainly due to the Fed's interest rate cut signal, which has led to pressure on the US dollar index and the pressure on depreciation of non-US currencies has generally slowed down. In addition, the People's Bank of China has continued to strengthen www.xmmen.communication with the market recently, actively guide expectations, and stabilize exchange rates. From a policy perspective, the People's Bank of China pointed out in the "China Monetary Policy Implementation Report for the Second Quarter of 2025" that it is necessary to insist on the market playing a decisive role in the formation of exchange rates, adhere to bottom-line thinking, implement www.xmmen.comprehensive policies, enhance the resilience of the foreign exchange market, stabilize market expectations, prevent the risk of exchange rate overshooting, and maintain the basic stability of the RMB exchange rate at a reasonable equilibrium level. As the expectations of the Federal Reserve's interest rate cuts heat up, the dislocation of China-US monetary policy cycles will improve, and the interest rate gap between China and the United States will narrow, which will provide strong support for the RMB exchange rate. China Merchants Securities Research Report pointed out that September may be the observation window for the appreciation of the RMB exchange rate. If the RMB returns to the 6th era, coupled with the appreciation of the actual effective exchange rate, it will amplify the attractiveness of China's equity assets, and China's assets will then usher in a www.xmmen.comprehensive revaluation.
(II) Domestic policy of stabilizing growth is being put into force to support the RMB
In order to promote sustained and stable economic growth, a series of policies for stabilizing growth in my country are being implemented one after another. In terms of fiscal policy, investment in infrastructure construction and other fields has been increased to stimulate economic growth. In terms of monetary policy, on August 25, the central bank carried out a reverse repurchase operation of 288.4 billion yuan with fixed interest rates and quantity bidding, and achieved a net injection of 21.9 billion yuan after hedging the reverse repurchase of 266.5 billion yuan that expired on the same day. At the same time, the central bank also carried out 600 billion yuan of MLF (medium-term lending facility) operations in fixed quantity, interest rate bidding, and multiple price winning bids, with a term of one year. In August, the central bank's net MLF injection of 300 billion yuan was the sixth consecutive month of additional volume. These policy measures can not only hedge the impact of external fluctuations on the economy, consolidate the fundamentals of high-quality development, but also strongly support the RMB exchange rate. The continuous efforts of domestic growth-stabilizing policies are the biggest certainty factor for stabilizing exchange rates. As the policy effect gradually emerges, the RMB is in the foreign exchange market.The stability and attractiveness are expected to be further improved.
3. Other currencies related news
(I) Eurozone economic data is differentiated, and the euro is cautious
The recent economic data of the euro area has shown a differentiation trend. Manufacturing data in some countries remain weak, but the service industry data in core countries such as Germany show certain signs of improvement. The ECB maintains a relatively loose stance on monetary policy to stimulate economic growth and stabilize inflation. However, the differentiation of economic data has caused the market to have different views on the economic outlook of the euro zone, which has led to a cautious trend of the euro in the foreign exchange market. On the one hand, economic uncertainty limits the euro's upward space; on the other hand, the European Central Bank's loose policies and the improvement of some economic data provide support to the euro to a certain extent, so that it will not fall sharply. Investors need to pay close attention to subsequent changes in the euro zone economic data and the European Central Bank's policy trends when trading the euro.
(II) The yen's safe-haven attributes are prominent, supported by geopolitical factors
The recent geopolitical situation is tense, and conflicts in the Middle East and other places have continued, which makes the yen's safe-haven attributes again highlighted. When global risk events occur, investors often seek safe-haven assets, and the yen, as one of the traditional safe-haven currencies, is favored by funds. In this case, the yen exchange rate is supported. In addition, the Bank of Japan maintains ultra-loose monetary policy, although it has limited the yen's growth to a certain extent, driven by safe-haven demand, the yen still shows strong resilience in the foreign exchange market. If geopolitical tensions continue to escalate further, the yen is expected to continue to benefit from the inflow of safe-haven funds and maintain a relatively strong trend.
The above content is all about "【XM Foreign Exchange Platform】: Collection of positive and negative news that affects the foreign exchange market". It was carefully www.xmmen.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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