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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】: 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:
1. Geopolitical risks escalate: Middle East conflicts intensify risk aversion
1. Military confrontation between Israel and Iran is becoming fierce
Israel's continuous air strikes on Iran's nuclear facilities triggered large-scale retaliation. The mutual missile attacks between the two sides have caused the situation in the Middle East to enter the most severe stage in recent years. Iran launched more than 200 missiles at Israel, including hypersonic missiles that broke through the anti-missile system, killing 4 people in Israel and injuring more than 200 people. Israel attacked Iranian oil facilities and civilian targets, and Tehran residential buildings collapsed, killing 60 people. The conflict may escalate further, and Iran threatens to blockade the Strait of Hormuz. If it xmmarkets.cnes true, it will directly affect 20% of the world's oil transportation, and oil prices may soar to US$130 per barrel in the short term.
2. International response and market impact
Help-haven assets are popular: gold prices broke through $3,400 per ounce, setting a record high; Brent crude oil rose by more than 7%, the US dollar index strengthened to 98.20 in the short term, and the yen's safe-haven attributes were highlighted.
Risk currencies are under pressure: the euro fell to the 1.1500 mark against the US dollar, the pound fell to 1.3500 against the US dollar, and the Australian dollar hit a low of 0.6450 against the US dollar.
EU Emergency Consultation: EU Foreign Minister will hold a video conference on Tuesday to discuss the situation in the Middle East. Germany, France and the United Kingdom are preparing to hold talks with Iran on the nuclear plan, but the market expects limited substantial progress.
Benefits: US dollar, yen, gold, crude oil.
Badlocks: Euro, British Pound, Australian Dollar.
2. Economic data release: Key indicators in Europe and the United States affect policy expectations
1. The weak UK real estate market has intensified expectations for interest rate cuts
UKThe annual rate of the China Rightmove average housing asking price index is expected to grow only 1.2% in June, xmmarkets.cnpared with the previous value of 1.5%, indicating that the real estate market continues to be sluggish. The market expects the Bank of England to cut interest rates by 25 basis points in August, and the pound is under short-term pressure against the US dollar. If the data is lower than expected, it may intensify downward pressure on the pound.
2. China's economic data is differentiated, xmmarkets.cnmodity currency is under pressure
Consumption and investment: China's total retail sales of consumer goods in May is expected to grow by 4.9%, slowing down from the previous value of 5.1%; the annual rate of urban fixed asset investment is forecast to be 4%, the same as the previous value. A weak recovery in consumption may drag down xmmarkets.cnmodities such as the Australian dollar.
Trade data: South Korea's annual export rate was revised at 1.3% in May and its annual import rate was revised at 5.3%, indicating that Asian trade demand improved marginally, but there are still concerns about weak exports to the euro zone.
Benefits: US dollar (safety demand).
Badministrative: pound, Australian dollar.
3. Central Bank policy game: The Federal Reserve's hawkish stance and European and Japanese easing
1. The Federal Reserve's interest rate resolution is approaching, and the hawkish signal supports the US dollar. The market is paying close attention to the Federal Reserve's interest rate resolution on June 19, and is expected to maintain interest rates unchanged and send hawkish signals. In his speech on June 16, Fed Chairman Powell warned the Trump administration's tariff policies could push up inflation and curb economic growth, suggesting the Fed will prioritize controlling inflation, with expectations of interest rate cuts cooled to 70% this year. The short-term support level of the US dollar index moves up to 97.80, and if it stands firmly, it may test the 99.52 resistance level. 2. The ECB rate cut cycle is xmmarkets.cning to an end, and the euro rebound is limited.
The ECB announced a 25 basis point cut rate to 2.00% on June 5, and implying that there is limited room for interest rate cuts in the future. The euro zone's CPI fell to 2.0% year-on-year in May, close to the target level, but weak economic growth (0.9% expected in 2025) still restricted the euro's upward trend. German Central Bank Governor Nagel will speak at the Euro Financial Summit, and if the dovish signal is released, it may suppress the euro.
3. The Bank of Japan maintains easing, and the yen is under short-term pressure
Bank of Japan Governor Kazuo Ueda said he will be wary of the sharp fluctuations in the ultra-long-term treasury yields, but maintain the position of easing policy remains unchanged. The safe-haven aversion attribute of the yen is limited to boosting geopolitical risks, and the short-term resistance of the US dollar against the yen is 144.00. If the breakthrough is exceeded, it may be tested at 145.00.
Benefits: US dollar.
Badministrative: Euro, Japanese yen.
IV. Uncertainty in trade policy: US tariffs and EU countermeasures
1. The United States imposes 50% tariffs on the EU and impacts the euro zone
The Trump administration has imposed a xmmarkets.cnprehensive 50% tariff on the EU from June 1, covering 370 billion euros of goods. The EU's planned retaliatory tariff list involves 95 billion euros of goods such as Boeing aircraft and whiskey. Elevated trade frictions intensify the downward risks of the euro zone economy, and the euro may fall by 1.1400 against the dollar.
2. China's foreign trade resilience and RMB exchange rate were stable
China's exports to the United States in May fell by 34.5% year-on-year, but exports to Africa and the United States grew, and the overall export structure was optimized. The central bank carried out a 400 billion yuan reverse repurchase operation, and the offshore RMB exchange rate stabilized at around 7.21, showing the market's confidence in China's economic policies.
Benefits: US dollar (safety demand).
Badlock: Euro.
5. Market sentiment and capital flow: VIX rebound and capital hedging
1. Panic index VIX rose to 21.85, and funds poured into the US dollar
Geographical conflicts and trade risks pushed up market hedging sentiment, and the VIX index hit a new high since May 23. Fund flow shows that open contracts in the US dollar index increased, speculative funds bet on the US dollar to strengthen; euro zone treasury bond yields fell, prompting funds to turn to pound assets.
2. xmmarkets.cnmodity currency is under pressure, the Australian dollar hit a new low this week
The United States expanded steel tariffs to the home appliance sector, and the conflict in the Middle East pushed up energy prices, xmmarkets.cnmodity currency is under pressure. The Australian dollar fell below 0.6488 against the US dollar, hitting a new low this week. If it falls below 0.6456, it may fall below 0.6400.
Benefits: US dollar, Japanese yen.
Badlocks: Euro, British Pound, Australian Dollar.
6. Key events and data forecast
17:00 Eurozone April seasonal adjusted trade account (previously value -19 billion euros)
21:00 U.S. University of Michigan Consumer Confidence Index in June (previously value 63.9)
22:00 Federal Announces Beige Book of Economic Conditions
The next day, 02:00 Federal Reserve Chairman Powell attended a congressional hearing
Conclusion:
U.S. dollar: geopolitical risk aversion and the hawkish position of the Federal Reserve, pay attention to the breakthrough of the 98.15 resistance level.
Euro: Trade frictions and economic weakness suppress, mainly short-selling rebound.
GBP: Weak real estate data and expectations of interest rate cuts are under pressure, range trading.
Yen: Geographical risk boost is limited, focus on 144.00 resistance.
Australia: The differentiation of xmmarkets.cnmodity demand and tariff shocks, the downward trend continues.
Investors need to pay close attention to the evolution of the situation in the Middle East, the Federal Reserve's policy signals and European and American economic data, and seize trading opportunities while controlling risks.
The above content is all about "【XM Forex】: Collection of positive and negative news that affects the foreign exchange market". It was carefully xmmarkets.cnpiled and edited by the XM Forex editor. I hope it will be helpful to your trading! Thanks for the support!
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