Trusted by over 15 Million Traders
The Most Awarded Broker
for a Reason
market analysis
A collection of positive and negative news that affects the foreign exchange market
Wonderful Introduction:
Love sometimes does not require the promise of vows, but she must need meticulous care and greetings; sometimes she does not need the tragic spirit of Liang Zhu turning into a butterfly, but she must need the tacit understanding and zeizao.cnpanionship with each other; sometimes she does not need the follower of male and female followers, but she must need the support and understanding of each other.
Hello everyone, today XM Foreign Exchange will bring you "【XM 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:
1. U.S. tariff policy upgrades has caused global trade tensions
The Trump administration announced that it would increase import tariffs on steel and aluminum from 25% to 50% from June 4, aiming to protect domestic industries. This move immediately aroused strong opposition from the EU, and the EU said it would be prepared to take countermeasures. If no solution was reached, the relevant countermeasures would take effect on July 14. Uncertainty in U.S. tariff policy has exacerbated global trade tensions, which may lead to a warming market risk aversion sentiment, pushing the dollar to strengthen as a safe-haven currency. However, tariff hikes may also curb global economic growth, weaken risk appetite, and put potential pressure on the US dollar.
2. The weak US economic data dragged down the US dollar
The US ISM manufacturing PMI fell to 48.5 in May, the lowest since November 2024, shrinking for the fourth consecutive month, indicating that the manufacturing industry continues to be weak. The final value of S&P Global Manufacturing PMI was 52, slightly lower than expected, further reflecting the slowdown in manufacturing growth. In addition, the U.S. manufacturing new orders, employment and inventory indicators performed poorly in May, indicating that domestic and foreign demand weakened at the same time. Weak economic data strengthens market expectations for the Fed's interest rate cut. The swap market shows that although the probability of interest rate cuts in June is low, expectations for interest rate cuts in the second half of the year have risen, which may put long-term pressure on the US dollar.
3. The ECB expects to cut interest rates heat up
The market generally expects that the ECB will announce its eighth interest rate cut on June 5, lowering deposit rates by 25 basis points from 2.25% to 2% in response to slowing economic growth and inflationary pressures. Berenberg analysts point out that if inflation continues to fall,The rate cut may be the last rate cut for the ECB, after which interest rates will remain at 2%. The final value of the manufacturing PMI in the euro zone in May was 49.4, which was lower than the boom and bust line, but improved from the previous value, indicating that the manufacturing downturn has eased slightly. However, the eurozone economy still faces challenges from trade policy uncertainty and energy price fluctuations, and the expectation of interest rate cuts may put pressure on the euro against the dollar.
4. The Bank of England has accelerated its pace of interest rate cuts
The Bank of England lowered the benchmark interest rate by 25 basis points to 4.5% on May 31, in line with market expectations. This is the third rate cut since June 2024. The UK's manufacturing PMI rose to 46.4 in May from 45.4 in April, the highest point in the past three months, but it is still in a shrinking range, indicating that manufacturing continues to be weak. The market expects the Bank of England to continue to cut interest rates in 2025, with the cumulative interest rate cuts for the whole year likely to reach 75 basis points to cope with slowing economic growth and inflationary pressures. Expectations of interest rate cuts may lead to further weakening of the pound against the dollar.
5. The Bank of Japan keeps interest rates unchanged
The Bank of Japan maintained the policy interest rate unchanged at 0.5% at the monetary policy meeting on June 3, which is in line with market expectations. The Bank of Japan stressed the high uncertainty of the economy and inflation, especially the impact of US tariff policies on the global economy. Japan's government bond auctions were poor in May, and yields rose, triggering concerns about liquidity tightening, which may put pressure on the yen exchange rate. However, the Bank of Japan said it will continue to pay attention to economic data, and if inflation continues to rebound, interest rates may be raised in the future.
6. The escalation of the situation in the Middle East has boosted risk aversion. The situation in the Middle East has become tense again recently. The missile attacks of the Houthi armed forces at Israeli airports and talks between Iran and Egypt have caused market concerns about interruption of crude oil supply. The heating of geopolitical risks has driven gold prices to rise, and the US dollar as a safe-haven currency is also supported. However, uncertainty in the situation in the Middle East may lead to intensifying market volatility, and investors need to pay close attention to the impact of the development of the situation on risky assets. 7. Other central bank policy trends
The Bank of Canada kept interest rates unchanged at 2.75% on June 3, stopping seven consecutive drops, aiming to observe the impact of tariff policies on the economy. The RBA has started a cycle of interest rate cuts since February 2025, and the current cash rate is 4.1%. The market expects further interest rate cuts in 2025, and the cumulative interest rate cuts throughout the year may reach 100 basis points. The Australian dollar has performed strongly against the US dollar in recent years, benefiting from a decline in U.S. interest rates and a rebound in global risk appetite.
8. Macroeconomic and geopolitical risks
The risk of the US fiscal "gray rhino" is gradually emerging. In June, about US $6.5 trillion in US Treasury bonds expired in a concentrated manner. If the US government cannot borrow new bonds smoothly or the debt interest rate continues to rise, it may intensify fiscal pressure and even trigger systemic financial risks. In addition, the US sovereign credit rating was downgraded to AA1 by Moody's, and the US dollar's position as the world's major foreign exchange reserve was challenged. Geopolitical aspectsThe easing and escalation of the situation in the Middle East alternately occur, and there is still uncertainty and may affect market sentiment at any time.
Summary
On June 3, 2025, the foreign exchange market faces the interweaving influence of multiple factors. U.S. tariff escalation, weak economic data and expectations of interest rate cuts put pressure on the US dollar; expectations of interest rate cuts by the European Central Bank and the Bank of England may cause the euro and pound to weaken; the Bank of Japan keeps interest rates unchanged, but volatility in the Treasury bond market may affect the yen; the escalation of the situation in the Middle East pushes risk aversion sentiment, which is beneficial to the US dollar and gold. Investors need to pay close attention to policy trends, economic data releases and geopolitical risks in major global central banks to cope with market volatility.
The above content is all about "【XM official website】: Collection of positive and negative news that affects the foreign exchange market". It was carefully zeizao.cnpiled and edited by the XM Forex editor. I hope it will be helpful to your trading! Thanks for the support!
Share, just as simple as a gust of wind can bring refreshment, just as pure as a flower can bring fragrance. The dusty heart gradually opened, and I learned to share, sharing is actually so simple.
Disclaimers: XM Group only provides execution services and access permissions for online trading platforms, and allows individuals to view and/or use the website or the content provided on the website, but has no intention of making any changes or extensions, nor will it change or extend its services and access permissions. All access and usage permissions will be subject to the following terms and conditions: (i) Terms and conditions; (ii) Risk warning; And (iii) a complete disclaimer. Please note that all information provided on the website is for general informational purposes only. In addition, the content of all XM online trading platforms does not constitute, and cannot be used for any unauthorized financial market trading invitations and/or invitations. Financial market transactions pose significant risks to your investment capital.
All materials published on online trading platforms are only intended for educational/informational purposes and do not include or should be considered for financial, investment tax, or trading related consulting and advice, or transaction price records, or any financial product or non invitation related trading offers or invitations.
All content provided by XM and third-party suppliers on this website, including opinions, news, research, analysis, prices, other information, and third-party website links, remains unchanged and is provided as general market commentary rather than investment advice. All materials published on online trading platforms are only for educational/informational purposes and do not include or should be considered as applicable to financial, investment tax, or trading related advice and recommendations, or transaction price records, or any financial product or non invitation related financial offers or invitations. Please ensure that you have read and fully understood the information on XM's non independent investment research tips and risk warnings. For more details, please click here
CATEGORIES
News
- 【XM Decision Analysis】--BTC/USD Forex Signal: Rising Wedge, Bearish Divergence F
- 【XM Group】--AUD/USD Forex Signal: Hits Ultimate Support, Brief Rebound Likely
- 【XM Market Review】--USD/TRY Forecast: Fitch Predicts Continued Tightening of Mon
- 【XM Decision Analysis】--BTC/USD Forecast: Bitcoin Surges Toward New Highs
- 【XM Forex】--USD/PHP Forecast: USD Weakens Against PHP: Market in Limbo