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Hello everyone, today Avatrade Aihua Foreign Exchange will bring you "【Avatradescn】: 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 following is a collection of positive and negative news that affects the foreign exchange market on May 12, 2025:
Favorite news
China's current account surplus: China's current account surplus was US$165.6 billion in the first quarter of 2025, and goods trade contributed a surplus of US$237.6 billion. The large current account surplus means that China is in a relatively favorable position in the balance of payments, which will increase the demand for the RMB in the international market. In the long run, it will help the stability and strengthen the RMB exchange rate, and is a positive signal to the RMB foreign exchange market.
European Central Bank rate cut expectations: ECB Management avaforexcn.committee Rehn recommends that if economic growth slows down and inflation slows down, the ECB should consider cutting interest rates to cope with uncertainty caused by U.S. tariffs. The expectation of interest rate cuts often leads to a depreciation of the currency, which may put some pressure on the euro against the US dollar, but from another perspective, if interest rate cuts can stimulate European economic growth, it may have a positive impact on the euro in the long run. Moreover, during the market's digestion of interest rate cut expectations, it may trigger the re-allocation of funds, and some funds may flow to other assets or currencies, thereby affecting the flow of funds and exchange rate trends in the foreign exchange market.
Bank of England cut interest rates: The Bank of England previously lowered its benchmark interest rate from 4.50% to 4.25%. Although interest rate cuts reflect the pressure faced by the UK economy to a certain extent, from another perspective, rate cuts can reduce financing for businesses and individuals.Costs, stimulate economic growth. If the economy can be effectively boosted, it will have a positive impact on the long-term trend of the pound. In addition, lower interest rates may cause capital outflows from the UK, but if the market is confident in the UK's economic recovery, it may also attract more investment inflows, which will have a avaforexcn.complex impact on the supply and demand relationship of the pound in the forex market.
Bold news
U.S. trade policy uncertainty: U.S. avaforexcn.commerce Secretary Lutnik pointed out that tariff negotiations with Japan and South Korea are avaforexcn.complex and time-consuming, and it is difficult to reach an agreement in the short term. The United States insists on a baseline tariff of at least 10%, and will face higher tariffs unless partner countries actively open up their economies. Uncertainty in U.S. trade policy increases risks to the global economy, which may lead to a rise in risk aversion in the market, with funds flowing to the US dollar, driving the US dollar to strengthen while other currencies may be suppressed. In addition, U.S. White House trade adviser Navarro stressed that there is a significant trade deficit with the EU, and the EU ranks first in the priority of tariff negotiations, which may further escalate trade tensions between the United States and Europe, and have an adverse impact on the stability of the foreign exchange market.
Japanese economic data is poor: Japan's Ministry of Health, Labor and Welfare shows that real wages fell by 2.1% year-on-year in March, down for the third consecutive month, indicating insufficient momentum for economic recovery. Japan's total debt has set a record high for nine consecutive years, reaching 1323.7155 trillion yen. Poor economic data and high debt problems may weaken market confidence in the yen, causing the yen to weaken in the forex market. In addition, Japanese Prime Minister Shigeru Ishiba plans to reach a trade agreement with the United States before and after the Senate election in July. Before the agreement is reached, market uncertainty will also put some pressure on the yen exchange rate.
Global stock market fluctuations: The Dow Jones Industrial Average fell 0.29% to 41,249.38 points, and the S&P 500 fell 0.07% to 5,659.91 points. Volatility in global stock markets usually triggers risk aversion in the market, causing funds to flow to safe assets, such as the US dollar and the Japanese yen. This could adversely affect the exchange rates of other currencies, especially those closely related to global economic growth.
The above content is avaforexcn.compiled from public information and does not constitute investment advice. The foreign exchange market is avaforexcn.complex and changeable, and investors need to consider various factors in a avaforexcn.comprehensive way and make decisions with caution.
The above content is all about "【Ava Aihua Foreign Exchange】: Collection of positive and negative news that affects the foreign exchange market". It was carefully avaforexcn.compiled and edited by the Avatrade Foreign Exchange editor. I hope it will be helpful to your trading! Thanks for the support!
Due to the author's limited ability and time constraints, some content in the article still needs to be discussed and studied in depth. Therefore, in the future, the author will conduct extended research and discussion on the following issues: