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market analysis
A collection of positive and negative news that affects the foreign exchange market
Wonderful Introduction:
If the sea loses the rolling waves, it will lose its majesty; if the desert loses the dancing of flying sand, it will lose its magnificence; if life loses its real journey, it will lose its meaning.
Hello everyone, today XM Foreign Exchange will bring you "【XM Foreign Exchange Market Analysis】: Highlights of positive and negative news that affect the foreign exchange market". Hope it will be helpful to you! The original content is as follows:
1. Many countries around the world reduce their dependence on the US dollar, and their status may be impacted (bad dollar)
Recently, many countries around the world have sent signals to reduce their dependence on US dollar assets. Swiss National Bank Deputy Governor Antoine? Martin said that in view of the Swiss National Bank's huge balance sheet size, in order to diversify investment, a large part of its US dollar holdings will be allocated to the euro. As of the end of June 2025, the Swiss National Bank's foreign exchange reserves exceeded US$1 trillion, with the US dollar accounting for 39% and the euro accounting for 37%. Its strategy changes have attracted much attention from the global market.
ASEAN has www.xmniubi.committed to promoting the use of local currencies in trade and investment in the "2026-2030 Economic www.xmniubi.community Strategic Plan", and reduce the impact of exchange rate fluctuations through measures such as promoting local currency settlement and strengthening regional payment interconnection. The Brazilian president called for increased currency swap use in the fields of trade and investment to change the situation of high reliance on the US dollar. New Zealand Super Annuity Fund will also shift its investment direction from the US stock market to the European stock market.
Analysts pointed out that many countries' reduction in dependence on the US dollar is due to factors such as weak dollar exchange rate, high tariff pressure and spillover effects of the Federal Reserve's policy. Barclays analyst Courtga said this is a continuous and slow process, but it has witnessed the decline in the dollar's status from the proportion of central bank reserves and trade settlement share. Bank of America reports show that the trend of ASEAN reducing US dollar usage is driven by factors such as individuals and businesses exchanging local currencies and large investors hedging risks, and this process may accelerate. Data www.xmniubi.compiled by Bloomberg shows that from the beginning of this year to July, the issuance of bonds denominated in local currencies in the Asia-Pacific region has increased significantly, reflecting investors' tendency to diversify their investments and reduce their dependence on US dollar assets, which has a long-term negative impact on the US dollar's position in the foreign exchange market.
2. The supply and demand balance of China's foreign exchange market, and the resilience of the RMB exchange rate has been enhanced (good for the RMB)
Since this year, China's foreign exchange market has shown strong resilience and a basic balance of supply and demand. The RMB exchange rate fluctuates in both directions and increases elasticity, which is generally stable for a basket of currencies. Due to the weakening of the US economy and Trump's tariff policy, the US dollar index weakened sharply, and the RMB exchange rate appreciated. In the first half of the year, the onshore RMB exchange rate against the US dollar rose by 1,332 basis points, and the offshore RMB exchange rate against the US dollar rose by 1,796 basis points.
China's economy has recovered and improved, macroeconomic policies have continued to exert force, the People's Bank of China's flexible and stable exchange rate operations, and the release of customer exchange settlement demand, etc., jointly support the strengthening of the resilience of the RMB exchange rate. Guan Tao, global chief economist at Bank of China Securities, said that the RMB exchange rate has further escaped from the adjustment since 2022, and market exchange rate expectations are basically stable.
The State Administration of Foreign Exchange has issued a number of policies to support the stable development of foreign trade and promote the facilitation of cross-border investment and financing. For example, implement a package of trade foreign exchange management reform policies such as optimizing foreign exchange fund settlement of foreign trade new business formats and facilitating the centralized management of overseas funds of contracted engineering enterprises; promote the implementation and effectiveness of measures such as abolishing domestic reinvestment registration for foreign-investment enterprises and facilitating cross-border financing of technology-based enterprises. These policies are conducive to stabilizing cross-border capital flows, enhancing market confidence in the RMB, and providing positive support for the RMB exchange rate.
3. OPEC+ production increase accelerates, and the crude oil market affects foreign exchange-related currencies (negative currency such as the Canadian dollar).
The Organization of Petroleum Exporting Countries and its allies (OPEC+) plan to approve a further increase of 548,000 barrels per day in September in the recent meeting. If implemented, the voluntary production cut measures of 2.2 million barrels per day implemented in November 2023 will be www.xmniubi.completely reversed one year ahead of schedule, aiming to accelerate the www.xmniubi.competition for global crude oil market share. Since April 2025, OPEC+ has terminated the production cut agreement in stages, and the scale of this production increase exceeded market expectations.
OPEC+'s aggressive production increase plan has put downward pressure on international oil prices, with Brent crude oil futures falling by more than 15% from its April high. Crude oil prices are closely related to www.xmniubi.commodity currencies such as the Canadian dollar. The decline in oil prices means that export revenues of oil-producing countries such as Canada may decrease, and economic growth is facing certain pressure, which in turn has a negative impact on www.xmniubi.commodity currencies such as the Canadian dollar. When trading related currency pairs such as the Canadian dollar, market investors need to pay close attention to the chain reaction of OPEC+ production increase on the crude oil market and economic level.
The above content is all about "【XM Foreign Exchange Market Analysis】: Collection of Positive and Negative News that Influence the Foreign Exchange Market". It was carefully www.xmniubi.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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