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market analysis
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 Official Website】: 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 the guidance of a weather vane, which profoundly affects the trend of the currency exchange rate. For investors, accurately grasping these positive and negative news is the key to making wise investment decisions. The following is a review of important news that affects the foreign exchange market on September 12, 2025.
1. Economic data related news
U.S. economic data performance
The economic data recently released by the United States has had a significant impact on the US dollar exchange rate. The PPI in August was only 2.6% year-on-year, far lower than the expected 3.3%. The previous value also revised down from 3.3% to 0.9%, and a negative growth of -0.1% month-on-month, which is very different from the expected 0.3%. The poor performance of this data greatly strengthened the market's expectations for the Federal Reserve to cut interest rates next week. From historical experience, when the Fed's expectation of interest rate cuts heats up, the US dollar often faces downward pressure because lower interest rates will reduce the attractiveness of US dollar assets to overseas investors and the possibility of capital outflows increases, which in turn drives the US dollar to depreciate. In the exchange rate relationship between other currencies against the US dollar, such as the euro against the US dollar, the pound against the US dollar, etc., if the US dollar weakens, these currencies have potential motivation to appreciate.
China's foreign exchange reserves hit a new high
Data released by the State Administration of Foreign Exchange on September 7 showed that as of the end of August 2025, China's foreign exchange reserves reached US$332.22 billion. This figure once again stood at the $3.3 trillion mark after the end of June, setting a new high in nearly 10 years. The increase in the scale of foreign exchange reserves shows that China's economy is operating stably and progressing, and its international balance of payments is in good condition, providing solid support for the stable RMB exchange rate. When foreign exchange reserves are sufficientAt that time, the market's confidence in the RMB has increased. In the foreign exchange market, the demand for the RMB may increase, pushing the RMB to maintain stable or even appreciate in exchange rates against other currencies. On the other hand, from the perspective of the global foreign exchange market, as an important economy, changes in the scale of China's foreign exchange reserves will also affect the market's overall expectations for emerging market currencies, and to a certain extent enhance the attractiveness of emerging market currencies.
2. News related to central bank policy
Feder policy suggests interest rate cuts
The Federal Reserve announced at 2 p.m. Eastern Time on Wednesday that it would keep interest rates unchanged in the target range of 4.25% to 4.5%. However, its dot map showed significant changes, with the number of officials who believe that interest rates should be cut in 2025 increased significantly. This decision and signal suggests the Federal Reserve's concerns about the economic outlook and also indicates that monetary policy will gradually shift to easing. As the Fed's expectation of interest rate cuts increases, the US dollar index has been boosted to a certain extent, but in the long run, the opening of the interest rate cut cycle may weaken the US dollar's strong position. For other currencies, such as the yen and the euro, they may usher in an opportunity to appreciate under the expectation of a weakening US dollar. In particular, the yen, as a traditional safe-haven currency, may attract more safe-haven funds to flow in against the backdrop of increased global economic uncertainty and weakening the US dollar, and drive the yen to appreciate.
The People's Bank of China's determination to stabilize the exchange rate
The People's Bank of China and the State Administration of Foreign Exchange have sent out positive and clear signals to stabilize the exchange rate in recent series of meetings. The regular meeting of the Central Bank's Monetary Policy www.xmhouses.committee in the fourth quarter of 2024 emphasized that it is necessary to 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. The 2025 Central Bank Work Conference and the National Foreign Exchange Management Work Conference also pointed out that foreign exchange reserves will continue to operate stably and maintain basic stability in the foreign exchange market. These policy signals convey China's determination to stabilize the RMB exchange rate to the market, help stabilize investors' expectations of the RMB exchange rate and reduce the sharp fluctuations in exchange rate caused by market panic. In actual market operations, investors will adjust their expectations for the RMB exchange rate based on the central bank's policy orientation, thereby affecting the RMB's supply and demand relationship and exchange rate trend in the foreign exchange market.
3. Geopolitical related news
Geopolitical tensions in the Middle East
The geopolitical situation in the Middle East continues to be tense, and Israeli air strikes on Qatar and other incidents continue to impact regional stability. The rise in geopolitical risks often triggers a sharp rise in risk aversion in the market. In the foreign exchange market, traditional safe-haven currencies such as the Japanese yen and Swiss francs are usually the first choice for investors. As investors buy safe-haven currencies, demand for these currencies has increased dramatically, driving their exchange rates up. For example, the yen may appreciate against other currencies in this case, including the US dollar, the euro, etc. For the euro zone, geopolitical tensions in the Middle East may also affect its energy supply and economic stability, further having an indirect negative impact on the euro exchange rate. becauseBecause the euro zone is highly dependent on energy in the Middle East, geopolitical conflicts may lead to fluctuations in energy prices, which will affect the inflation level and economic growth prospects of the euro zone, causing the euro to face downward pressure on the foreign exchange market.
Uncertainty of global trade frictions
Although global trade frictions have not increased significantly at present, potential uncertainty is still high. The tightening of US sanctions on Iran's oil trade and the rise of trade protectionism in some regions have cast a shadow on the global trade environment. The intensification of trade frictions will affect the economic growth and trade balances of various countries, which will be reflected in the currency exchange rate. For example, if trade frictions cause a country to be blocked from exports and economic growth slows down, its currency may face pressure to depreciate. Among major currency pairs, such as the US dollar against emerging market currencies, uncertainty in trade frictions may lead to intensifying volatility in emerging market currencies, investors' confidence in emerging market currencies declines, funds flow out of emerging markets, driving emerging market currencies to depreciate, while the US dollar may remain relatively strong, supported by safe-haven demand and relative economic stability.
In general, on September 12, 2025, the foreign exchange market was affected by the interweaving of various positive and negative news. Factors such as economic data, central bank policies and geopolitics have jointly shaped the www.xmhouses.complex pattern of the foreign exchange market. Investors need to pay close attention to the dynamic changes in these news and flexibly adjust their investment strategies to cope with uncertainty in the foreign exchange market.
The above content is all about "【XM Forex Official Website】: Collection of Positive and Negative News that Influence the Foreign Exchange Market". It was carefully www.xmhouses.compiled and edited by the XM Forex editor. I hope it will be helpful to your trading! Thanks for the support!
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