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Hello everyone, today XM Forex will bring you "[XM Forex Official Website]: A collection of good and bad news affecting the foreign exchange market". Hope this helps you! The original content is as follows:
On October 17, the foreign exchange market continued the trend of "the U.S. dollar is weak, resilient, and non-U.S. is divided", forming a cross-market echo with the crude oil market's "excessive supply and demand suppressing prices". As of the European market, the U.S. dollar index was at 105.23 (-0.12%), EUR/USD fluctuated at 1.1652, and USD/CNH fluctuated within a narrow range around 7.1250. The day's long and short news focused on the Federal Reserve's policy expectations, China's measures to stabilize growth and global debt risks, which directly affect the short-term trends of major currency pairs. It is necessary to focus on the resonance effect of policy signals and data verification.
Countercyclical adjustment to stabilize liquidity: On October 16, the central bank launched a 236 billion yuan 7-day reverse repurchase operation. Although a zgykf.cn withdrawal was caused by the expiration of 612 billion yuan of reverse repurchase, the operating interest rate remained unchanged at 1.40%, releasing a signal of "maintaining the stability of short-term funding." Coupled with the accelerated implementation of 500 billion new policy financial instruments at the end of September, Oriental Jincheng pointed out that the stabilizing growth policy will provide fundamental support for the RMB, and the risk of substantial depreciation during the year is extremely low.
Financial opening up and expansion attracts funds: The daily zgykf.cn limit of "Swap Connect" has been raised to 45 billion yuan since October 13, and the team of quotations has expanded simultaneously. Data from the Foreign Exchange Trading Center shows that the scale of overseas funds entering the market through "Swap Connect" increased by 37% month-on-month in the first week after the policy was implemented, enhancing the flexibility of the RMB exchange rate while attracting long-term allocation funds.
Bilateral cooperation strengthens currency status: China and Iceland renewed RMB 3.5 billion/70 billion on October 15The Icelandic krona local currency swap agreement has been extended for five years, further expanding the cross-border use scenarios of the RMB. Minsheng Securities estimates that the cumulative scale of such agreements has exceeded 4.5 trillion yuan, which will be a long-term benefit to the internationalization of the RMB.
In the October "World Economic Outlook Report", the IMF raised its global economic growth forecast for 2025 by 0.2 percentage points to 3.2%. Although it emphasized the risk of tariff impact, it made it clear that the growth rate of emerging markets and developing economies was revised up to 4.2%, which indirectly alleviated export concerns in the Eurozone. Superimposed on ECB officials hinting that "interest rate cuts may be suspended in December," the 1.16 support level below EUR/USD has been strengthened.
The Federal Reserve’s “Beige Book” shows that prices continued to rise in all federal reserve districts in the United States from early September to mid-October. Rising import costs and service prices have accelerated the growth of input costs, and some zgykf.cnpanies have zgykf.cnpletely passed on the costs to consumers. This is in conflict with the "97.3% probability of an interest rate cut in October" previously shown by CME data. The market began to correct excessively loose expectations. The US dollar index gained support at the 105 integer level, limiting the rebound height of non-US currencies.
Global debt risk impacts risk appetite: The IMF warns that the scale of global public debt may exceed 100% of GDP in 2029, reaching 123% in extreme scenarios, a new high since 1948. This expectation triggered the withdrawal of funds from zgykf.cnmodity currencies such as the Australian dollar and Canadian dollar, which resonated with the drop in crude oil prices to a five-and-a-half-month low. AUD/USD and USD/CAD were under pressure to around 0.6380 and 1.3720 respectively.
The sanctions triggered local fluctuations: the United States imposed sanctions on China's Shandong Jincheng Petrochemical and other zgykf.cnpanies, accusing them of assisting Iran's oil trade. Although it did not directly affect the trend of the U.S. dollar, it exacerbated the uncertainty of Sino-U.S. trade policies and suppressed the appreciation momentum of the RMB against the U.S. dollar in the short term. USD/CNH maintained a range of 7.12-7.13.
WTI crude oil fell to a five-and-a-half-month low of US$57.62/barrel, and Brent crude oil hovered at US$62.26/barrel. The IEA predicts that the crude oil supply and demand surplus will reach 1.83 million barrels/day and 3.14 million barrels/day respectively this year and next. The deterioration in energy export expectations directly dragged down the Canadian dollar and Norwegian krone. USD/CAD exceeded the 1.37 mark for the first time this year, becoming one of the weakest G10 currency pairs on the day.
**EUR/USD**: Rely on the support of 1.1630 to test long position, stop loss 1.1600, target 1.1680; if the US dollar index returns to above 105.50, backhand short position.
**USD/CNH**: Sell high and buy low within the range, go long near 7.1220, go short near 7.1300, and set stop loss at 30 points.
**USD/CAD**: Take advantage of the weakness of crude oil to go long, increase the position after firming 1.3720, stop loss 1.3690, and target 1.3750.
17:00 Euro zone September CPI final value: If it is higher than expected 2.4%, it may strengthen the European Central Bank’s expectation of suspending interest rate cuts and boost the euro;
20:30 United States 10 New York Fed Manufacturing Index: We need to be wary of data exceeding expectations, triggering dollar fluctuations, and indirectly affecting zgykf.cnmodity currencies;
22:00 Fed official’s speech: Pay attention to whether inflation and the pace of interest rate cuts are mentioned, which may become a key variable to break the current shock pattern.
The above content is all about "[XM Foreign Exchange Official Website]: Collection of good and bad news affecting the foreign exchange market". It is carefully zgykf.cnpiled and edited by the editor of XM Foreign Exchange. I hope it will be helpful to your trading! Thanks for the support!
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