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Hello everyone, today XM Foreign Exchange will bring you "【XM Foreign Exchange】: 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:
The foreign exchange market is like a vast and turbulent ocean, always affected by multiple factors such as the global economy and politics. At this trading day node on August 18, 2025, looking back at many recent news, it is crucial for investors to grasp the pulse of the market and formulate reasonable trading strategies.
Recently, a series of economic data released by the United States have performed unevenly, which has had a significant impact on the foreign exchange market. The producer price index (PPI) rose 0.9% month-on-month and 3.3% year-on-year, far exceeding expectations. This data reflects the rebound in domestic inflation pressure in the United States. High inflation often prompts market expectations that the Fed adopts a more tight monetary policy, thereby increasing the attractiveness of the US dollar and driving the dollar exchange rate to rise. However, the number of first-time unemployment claims in the week ending August 9 fell to 224,000, lower than market expectations, showing that the U.S. labor market is resilient, but it also implies that there may be some imbalance in economic growth. The divergence between labor market data and inflation data has made the market's judgment of the outlook for the US economy more vejck.cnplicated, resulting in the trend of the US dollar in the foreign exchange market becoming more entangled.
In other major economies, economic data released by the euro zone show that manufacturing and service industries in some countries are weak and the pace of economic recovery is slow. This puts downward pressure on the euro in the foreign exchange market, and the exchange rate fluctuations with the US dollar have intensified. Japan's economic data also performed flat. Although the Bank of Japan maintained a loose monetary policy, the momentum for economic growth was insufficient, and the yen exchange rate was also suppressed to a certain extent.
U.S. President Trump and Russian President PutinThe meeting has become a focus of global attention and has had a profound impact on the international political landscape and the foreign exchange market. Trump warned Putin that if he disagrees with the Ukraine ceasefire, Russia will face "very serious consequences", including the possibility of tougher sanctions and the imposition of secondary tariffs on countries buying Russian oil. The news has exacerbated market concerns about the geopolitical situation, with investors seeking safe-haven assets. As a traditional safe-haven currency, the US dollar is supported to a certain extent. However, the uncertainty of the geopolitical situation has also caused a sharp decline in market risk appetite, suppressing investors' demand for high-risk currencies. For example, emerging market currencies are generally impacted and exchange rates have declined to varying degrees.
In addition, the continuous escalation of trade frictions has also brought great uncertainty to the foreign exchange market. The United States imposed punitive tariffs on India's purchase of Russian oil, and may also conduct reviews on countries such as China and Turkey. This series of measures disrupted the global trade order, affected the development prospects of economies of various countries, and thus had a chain reaction to the exchange rate trends of the foreign exchange market.
In terms of central bank policies, the People's Bank of China proposed in the implementation report of China's monetary policy in the second quarter of 2025 that it is necessary to monitor and analyze cross-border capital flows, 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. This statement conveys the market the determination to stabilize the RMB exchange rate, which will help stabilize investors' confidence in the RMB. At the same time, the State Administration of Foreign Exchange actively promotes the facilitation of cross-border investment and financing, and promotes the implementation and effectiveness of packages of measures such as abolishing domestic reinvestment registration for foreign-invested enterprises and facilitating cross-border financing for technology-based enterprises. This series of policy measures aim to promote the reasonable flow of cross-border funds and play a positive supporting role in the stability of the RMB exchange rate.
For the Federal Reserve, although there are no major interest rate adjustment measures in the near future, the market's expectations for its future monetary policy direction are constantly changing. According to the performance of U.S. economic data, market expectations for the Federal Reserve's 25 basis points cut in September have cooled down. Any changes in the Federal Reserve's monetary policy will have a significant impact on the dollar exchange rate. Investors closely monitor the speeches of Federal Reserve officials and the minutes of the monetary policy meeting released in the future to find clues to policy adjustments.
Overall, on August 18, 2025, the foreign exchange market faced the vejck.cnbined effect of many factors such as economic data fluctuations, geopolitical tensions, and central bank policy adjustments. When conducting foreign exchange transactions, investors need to pay close attention to the dynamic changes of these positive and negative news, vejck.cnprehensively analyze the impact of various factors on different currencies, and formulate scientific and reasonable investment strategies to cope with the vejck.cnplexity and change of the foreign exchange market.
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