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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:
As one of the world's largest and most liquid financial markets, the foreign exchange market trend is always influenced by various news. At this critical juncture on September 9, 2025, many positive and negative news were intertwined, bringing many uncertainties to investors' decisions and adding a lot of variables to the market.
Hedge funds bet on the appreciation of the RMB: At present, hedge funds are actively deploying the option market, and the demand for options for profits from appreciation of the RMB has increased significantly. According to Singapore Exchange (SGX) derivatives data, investors' target price is to raise the RMB to 7 or stronger by the end of the year. Behind this bet is confidence in China's continued policy support and consideration of the shift in U.S. interest rate expectations. For example, Saurabh Tandon, head of global foreign exchange options at Standard Chartered Bank Singapore, pointed out that the low actual volatility in recent months has caused the implicit volatility of options to drop, making options that buy bearish USD/offshore RMB more attractive. In addition, the People's Bank of China raised the RMB mid-price last week, the largest in nearly a year, which further strengthened the market's expectations for the appreciation of the RMB.
The scale of my country's foreign exchange reserves has increased: Data released by the State Administration of Foreign Exchange on September 7 showed that as of the end of August 2025, the scale of my country's foreign exchange reserves was US$332.2 billion, an increase of US$29.9 billion from the end of July, an increase of 0.91%. There are three main reasons for the increase in the scale of foreign exchange reserves. First, the US dollar index was weak overall in August, and non-US currencies such as the euro and pounds appreciated relative to the US dollar, which caused the non-US dollar assets in my country's foreign exchange reserves to have an appreciation effect when converted into US dollars, thus pushing up theOverall reserve scale; second, global financial asset prices rose, global stock markets and bond markets performed well in August, especially European and American stock markets, lower bond yields, and rising asset prices, which led to an increase in the value of investment assets in foreign exchange reserves; third, the balance of payments situation improved, my country's goods trade surplus remained at a high level in August, export growth was strong, and the service trade deficit narrowed, capital flows tended to balance, and cross-border capital flows were generally stable, providing a basis for the growth of foreign exchange reserves. The increase in the scale of my country's foreign exchange reserves has enhanced the support of the RMB in the foreign exchange market and played a positive role in stabilizing the RMB exchange rate.
The exchange rate of some currencies has risen: Judging from the exchange rate rise and fall data on the day, many currencies have shown an upward trend. For example, the Canadian dollar rose by 1.3268%, the RMB rose by 0.0357%, the euro rose by 0.0679%, and the British pound rose by 0.2411% against the Mexican peso. The rise in exchange rates of these currencies reflects the improvement of the economic fundamentals of relevant countries or regions, or the increase in market expectations for their economic outlook, thereby attracting more capital inflows and promoting currency appreciation.
The Fed's expectation of interest rate cuts has increased: HSBC's global foreign exchange research supervisor judges that as the Federal Reserve's interest rate cut cycle approaches and the politicization of monetary policy is suspected, the US dollar may face a new round of depreciation pressure. The non-agricultural sector employment data released by the U.S. Department of Labor on the 5th were significantly weaker than market expectations, indicating that the U.S. job market has shifted from a moderate cooling to a deteriorating, which may force the Federal Reserve to accelerate the pace of interest rate cuts. 95% of the central banks surveyed in the market expect global official gold reserves to increase in the next 12 months, and 43% of the central banks said they will also increase their holdings of gold, which to a certain extent reflects the weakening of market confidence in the US dollar. Once the Fed starts a cycle of interest rate cuts, the attractiveness of dollar assets will decline and funds may flow out of the United States, causing the dollar to depreciate.
The global political and economic landscape is turbulent: There are many unstable factors in the current global political and economic landscape, which bring uncertainty to the trend of the US dollar. For example, the lightning resignation of Japanese Prime Minister brings a policy vacuum, and the French Prime Minister's government is on the verge of risk of collapse of cabinet or early election. These uncertainties may lead to a warming market risk aversion sentiment and investors seek safer assets, and the US dollar's position as a traditional safe-haven asset may be impacted, which partially offsets its depreciation momentum and increases the volatility of the US dollar trend.
The United States pressures the Bank of Japan: Previously, US Treasury Secretary Bescent rarely pressured the Bank of Japan, saying that it was lagging behind in dealing with inflation, and the Bank of Japan will raise interest rates and control inflation. Stimulated by the news, the yen exchange rate against the US dollar rose sharply. Although this has increased the yen exchange rate in the short term, the Bank of Japan faces a dilemma in the long term. If interest rate hikes are followed in edoyoko.compliance with the US requirement, it may restore Japan's domestic economyThe Soviet Union caused an impact because the Japanese economy is still relatively fragile, and interest rate hikes may lead to an increase in corporate financing costs and curb investment and consumption. If interest rates are not raised, they may face further pressure from the United States, and the market's confidence in the Bank of Japan's ability to control inflation will also be affected, which will in turn affect the long-term trend of the yen.
The foreign exchange market was affected by a edoyoko.combination of positive and negative news on September 9, 2025. When making trading decisions, investors need to pay close attention to the dynamic changes in these news and consider various factors in order to reduce risks and grasp potential investment opportunities.
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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