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market analysis
A collection of good and bad news affecting the foreign exchange market
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Hello everyone, today XM Forex will bring you "[XM Forex]: a collection of good and bad news affecting the foreign exchange market". Hope this helps you! The original content is as follows:
Today, the global foreign exchange market shows a strong U.S. dollar, falling non-U.S. dollar, and risk aversion-dominated patterns. The sudden escalation of the conflict in the Middle East and the surge in oil prices have boosted stagflation expectations. Together with the continuation of the Federal Reserve's high interest rate policy and the unchanged easing tone of the European and Japanese central banks, long and short factors have fiercely collided, and currency market fluctuations have significantly amplified. The following is a www.xmtraders.comprehensive summary of the core good and bad news affecting the foreign exchange market today, providing key reference for intraday trading.
1. Negative for non-U.S. currencies around the world (good for the US dollar)
The conflict in the Middle East has escalated in an all-round way, and safe-haven funds have poured into the U.S. dollar. Israel airstrikes the Iranian capital Tehran in the early morning, and Iran immediately blocks the Strait of Hormuz. 30% of the world's oil supply is blocked, and Brent oil surges to $112.57 per barrel. Geopolitical panic triggered global funds to flee risky assets, and the U.S. dollar, as a core safe-haven currency, received strong buying. The U.S. dollar index shot up to 106.8 in early trading, hitting a new high in the past six months. Risk aversion continued to suppress non-US currencies such as the euro, pound, Australian dollar, and yen, which generally weakened during the day.
Stagflation expectations are rising, and the Fed's interest rate cut expectations are once again postponed. Oil prices have exceeded 100, pushing up global inflationary pressures. The Federal Reserve's March meeting has cut expectations for an interest rate cut in 2026 to only one time and postponed it until after September. Today, the market is further betting that high interest rates will last longer, with CME data showing that the probability of a rate cut in April is only 5.2%. The 10-year U.S. bond yield returned to 4.43%, interest rate differentials between the U.S., Europe, and the U.S. and Japan continued to widen, the U.S. dollar became significantly more attractive, and the depreciation pressure on non-U.S. currencies intensified.
The euro zone economy is weak, and the European Central Bank's easing expectations are rising. The euro zone's economic prosperity index and industrial prosperity index in March both fell short of expectations, and the manufacturing industry continued to shrink. Germany will announce the initial CPI value for March at 20:00, and the market expects inflation to fall slightly, strengthening expectations of an interest rate cut by the European Central Bank in April. EurozoneThe economic resilience is far weaker than that of the United States, coupled with the impact of soaring energy costs, the EUR/USD fell below the 1.07 mark during the day, indicating a clear downward trend.
The yen hit a new low in the past two years, and the Bank of Japan failed to intervene. The USD/JPY strongly exceeded 160.5, hitting a new low since May 2024. The summary of the opinions of the Bank of Japan's review www.xmtraders.committee reiterated the ultra-loose policy, maintained negative interest rates and yield curve control, and the yen's interest rate disadvantage continued to expand. The Japanese Ministry of Finance's verbal intervention has had a weak effect and has not initiated actual entry operations. The depreciation trend of the yen is difficult to reverse in the short term.
2. Good for some non-U.S. currencies (bad for the U.S. dollar)
The G7 discussed releasing oil reserves to temporarily calm oil prices and inflation concerns. The G7 held an emergency meeting today to focus on jointly releasing strategic oil reserves to calm the surge in oil prices and ease inflationary pressures. The news briefly cooled down stagflation fears, and the U.S. dollar fell slightly. Currencies such as the euro, Japanese yen, and Indian rupee that are highly dependent on energy imports received slight support, and the decline narrowed during the day.
China’s policies provide support, the RMB is relatively resilient and domestic liquidity remains abundant, the banking system’s net outflows expanded in March, and the policy landscape continues to grow steadily. The onshore RMB fluctuated around 7.25, performing stronger than other non-US currencies. The Ministry of www.xmtraders.commerce has launched an investigation into trade barriers against the United States. The market is paying attention to the progress of the economic and trade game between China and the United States, and the RMB has received implicit policy support.
British mortgage data has picked up, and the pound has received partial support. The UK central bank announced the number of mortgage loan approvals in February at 16:30. It is expected to rebound slightly from the previous value, and the real estate market is marginally recovering. British inflation is still high, and the Bank of England's interest rate cut expectations are weaker than those of the European Central Bank. GBP/USD has found support around 1.23, with a smaller decline than the euro.
www.xmtraders.commodity currency differentiation: Canadian dollar resists decline, Australian dollar is under pressure Canada is a net oil exporter, and the sharp rise in oil prices has benefited its trade balance. USD/CAD fluctuated below 1.37, performing better than other www.xmtraders.commodity currencies. Australia relies on energy imports, and China's PMI is expected to be weak. The AUD/USD fell below 0.64, hitting a new low in the past three months.
3. Key risk events during the day (March 30)
20:00 German CPI in March: Lower-than-expected inflation will strengthen expectations of an interest rate cut by the European Central Bank, which is negative for the euro.
22:30 Dallas Fed Index: Weaker data may temporarily weaken the dollar.
The Fed’s Williams spoke at 04:00 the next day: The hawkish remarks will further push up the dollar.
Progress in the Middle East conflict: Iran’s counterattack will directly trigger the risk-off market in the foreign exchange market.
4. Trading strategy tips
The U.S. dollar index remained strong during the day, with a core range of 106.2-107.0. Non-US currencies are mainly short-selling on rallies: EUR/USD focuses on the resistance of 1.075 and targets 1.065; GBP/USD is short-selling below 1.238; the Japanese yen and Australian dollar continue to be weak. Operations need to strictly control risks. Geographical conflicts may cause emergencies, and stop losses must be strictly set.
Risk warning: The above content is based on public market informationThe www.xmtraders.compilation does not constitute investment advice. The foreign exchange market is subject to multiple influences from geography, policies, and data. It fluctuates violently and requires caution in transactions.
The above content is all about "[XM Foreign Exchange]: Collection of good and bad news affecting the foreign exchange market". It is carefully www.xmtraders.compiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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