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Hello everyone, today XM Foreign Exchange will bring you "【XM Foreign Exchange Market Analysis】: 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:
On June 17, 2025, the foreign exchange market will continue the main line of geopolitical and monetary policy game. The following is an analysis of key news and market impact:
Event-driven: Iran sends out a signal that it is willing to restart nuclear negotiations, shipping risks in the Strait of Hormuz have temporarily cooled down, crude oil prices fell by 10% from the day-high, and gold futures fell by more than 2%. Market risk appetite has rebounded, safe-haven currencies such as the yen and Swiss franc are under pressure, and risky currencies such as the euro and the pound are supported.
Money impact: Cross pairs such as EUR/JPY, GBP/JPY may rebound, and the US dollar index once fell below the 98 mark due to the withdrawal of safe-haven funds.
Institutional View: UBS pointed out that if the Middle East conflict does not escalate further, risky assets will continue to repair the market, and it is recommended to lay out long positions in the euro against the Japanese yen on dips.
Politics signal: Philadelphia Fed Chairman Huck said that only one interest rate cut this year is a reasonable expectation, and Minneapolis Fed Chairman Kashkali emphasized that it is necessary to see evidence of continued decline in inflation before considering interest rate cuts. The hawkish stance of Fed officials strengthens expectations for a long-term strengthening of the dollar.
Market reaction: US Treasury yields rose across the board, with the 10-year US Treasury yield rising to 4.2751%. The US dollar index broke through 98 in the European session and recovered its lost ground, and eventually fell slightly by 0.21% to 99.01.
Technical: The daily chart of the US dollar index is displayed at 98.50-The 99.50 range oscillates. If it stands firmly at 99.00, it may reach the 100.00 integer mark.
Retail sales data: The final monthly retail sales rate in June of the United States is 0.5%, in line with expectations; the monthly core retail sales rate is 0.4%, exceeding expectations 0.3%, indicating that consumption resilience remains. The data strengthens the need for the Federal Reserve to maintain high interest rates, which is good for the US dollar.
Treasury bond auction performance: The total amount of the 20-year Treasury bond auction in the United States on June 16 was US$16 billion, with a bid multiple of 2.46, and a high allocation percentage of 41.02%, indicating that the market demand for US bonds is strong, which indirectly supports the US dollar.
The labor market is strong: the UK's ILO unemployment rate remained at its lowest level since 2008 in three months, with annual wage growth reaching a high of more than three years, and the service industry inflation is far beyond the central bank's expectations. Market expectations for the Bank of England's interest rate cut cooled, and the pound hit a one-month high of 1.5741 against the US dollar.
Institutional Strategy: Barclays recommends that if the pound stands firmly at 1.5700, you can try long with a light position, target 1.5800 and stop loss 1.5650.
Potential threat: Although Iran has released a slowdown, the conflict between Israel and Iran has not edoyoko.completely subsided. If the situation escalates again, it may cause concerns about interruption of crude oil supply and push up safe-haven currencies.
Market warning: Goldman Sachs warns that if the Strait of Hormuz is blocked, oil prices may exceed US$130 per barrel, and safe-haven assets such as the yen and Swiss franc will strengthen significantly.
Policy differences: The European Central Bank cut interest rates by 25 basis points in March and April 2025, but the market has differences on subsequent paths. UBS predicts that the ECB may raise interest rates by the end of 2026, but the pressure to cut interest rates in the short term remains.
Weak economic data: The eurozone's annualized labor cost rate rose 1.8% in the first quarter, but economic growth expectations were lowered to 1.2%, and eased inflation pressures provided room for interest rate cuts. The euro may be under pressure against the US dollar in the range of 1.0800-1.0900.
Policy statement: The Bank of Japan maintained interest rates at its June 17 meeting, continued to reduce the scale of bond purchases but did not send out a signal of interest rate hikes, and the yen may continue to weak against the US dollar.
Technical: The USD/JPY daily chart shows an upward trend. If it breaks through 145.00, it may test the key resistance of 146.00.
interest rate resolution: The RBA keeps the benchmark interest rate unchanged by 4.35%, emphasizing that it is necessary to see evidence of a sustainable decline in inflation before considering interest rate cuts. The Australian dollar may fluctuate against the US dollar at 0.6600-0.6700 range.
Economic Risk: Fitch Ratings notes that overheating public spending in Australia may lead to a budget deficit in fiscal 2025, and the Australian dollar may be under further pressure if economic data is weak.
Federal interest rate resolution prospects: The market expects the Federal Reserve to maintain interest rates unchanged on the meeting on June 19, but we need to pay attention to the point map's guidance on the path to interest rate cuts. If the signal is sent out that "only one interest rate cut is cut this year", it may boost the US dollar.
ECB policy trends: ECB officials may send policy signals at the Lujiazui Forum. If inflation pressure is mentioned to be eased, it may strengthen expectations of interest rate cuts.
UK inflation data: If the UK's May CPI data released on Wednesday exceeds expectations, it may support the pound; on the contrary, if it is weak, it may suppress the pound.
EUR/USD: If the euro zone inflation data is weak, it may fall by 1.0800; if the European Central Bank sends hawkish signals, it may rebound to 1.0950.
GBP/USD: Stable 1.5700 can be longer, with a target of 1.5800; if it falls below 1.5650, it may fall below 1.5600.
USD/JPY: If you break through 145.00, you can catch up with the long target, and the target is 146.00; if it is blocked, it may fall back to 144.00.
AUD/USD: Try long with light positions near 0.6600, stop loss 0.6570, target 0.6700.
Geopolitics: If the situation in the Middle East deteriorates again, it may trigger a surge in safe-haven assets. We need to be wary of short-term fluctuations in gold and yen.
Economic data: Pay attention to US retail sales data on Tuesday and UK CPI data on Wednesday. If it exceeds expectations, it may cause severe currency fluctuations.
Central Bank Policy: The policy statements of the Federal Reserve and the European Central Bank may change market expectations and positions need to be adjusted in a timely manner.
On June 17, the foreign exchange market will engage in a game around geopolitical easing, Fed policy expectations and economic data. Positive factors include the easing of the Middle East situation, the hawkish signal of the Federal Reserve and the strong U.S. economic data; negative factors include geopolitical risk aftermath, the ECB's interest rate cut expectations and the Bank of Japan's easing policy. Investors need to pay close attention to breakthrough signals at key points, flexibly adjust strategies based on technical and news aspects, and strictly control risks. Short-term range operations are recommended, and medium- and long-term markets can be deployed after the Federal Reserve's resolution.
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 edoyoko.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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