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Hello everyone, today XM Forex will bring you "[XM Forex Platform]: A collection of good and bad news affecting the foreign exchange market". Hope this helps you! The original content is as follows:
The probability of the Federal Reserve cutting interest rates has soared: On October 20, CME quoted CME's "Fed Watch" data to show that the probability of the Federal Reserve cutting interest rates by 25 basis points in October has soared to 99%, and the probability of a cumulative 50 basis point interest rate cut in December is as high as 94%. Increased expectations of interest rate cuts will reduce corporate financing costs and stimulate investment and consumption. It will also cause the U.S. dollar index to fluctuate downward, which will be beneficial to other currencies.
China's two monetary policy tools have injected funds into the market: stock buybacks, holdings, re-lending and swap facilities created by the People's Bank of China and other departments to support the capital market have injected hundreds of billions of funds into the market over the past year. As of October 18, 2025, the swap facility has carried out two operations with a cumulative amount of 105 billion yuan. The number of participating institutions has been expanded from 20 to 40. Nearly 700 listed www.xmlone.orgpanies and major shareholders have disclosed the use of repurchase and increase loans. The total loan limit exceeds 330 billion yuan, which helps stabilize the RMB exchange rate.
The exchange rates of some currency pairs rose: On October 20, the exchange rate of the Solomon Islands dollar against the Japanese yen rose by 0.9063%, the exchange rate of the Canadian dollar against the West African CFA franc rose by 0.0241%, the exchange rate of the Canadian dollar against the South African rand rose by 0.5729%, the exchange rate of the Swiss franc against the Australian dollar rose by 0.2548%, the exchange rate of the Swiss franc against the Japanese yen rose by 0.5769%, etc. The rise in these currency pairs is good for the corresponding currencies.
Eurozone economic growth momentum strengthens: The Eurozone economic growth momentum is relatively strong, and business activity increased at the fastest rate in 16 months in September, which supported the euro and is expected to resume its appreciating trend.
The United States has imposed new tariffs on imported trucks and parts: On October 17, U.S. President Trump signed an executive order to impose a new tariff of 25% on imported medium and heavy-duty trucks and parts and a 10% tariff on imported passenger cars starting from November 1. This move may trigger an escalation of trade frictions, affect global economic growth prospects, put pressure on risk assets, and be detrimental to the stability of the foreign exchange market.
There are frequent signs of tight liquidity in the U.S. market: New York Fed data shows that on October 15, local time, the single-day operation scale of the Federal Reserve’s Standing Repurchase Facility (SRF) reached US$6.75 billion, and on October 16 it reached US$8.35 billion, setting a record in a non-end-of-quarter environment since the outbreak of the new crown epidemic. This indicates that there is some pressure on U.S. market liquidity, which may have a negative impact on the U.S. dollar exchange rate.
British economic growth is sluggish and inflation is high: British economic growth is sluggish, and the September PMI showed that the economic recovery is almost stagnant. At the same time, the inflation rate is still higher than the Bank of England's 2% target. This makes the pound perform poorly and faces greater pressure in the foreign exchange market.
Weak Canadian economic data and uncertainty about tariffs: Weak domestic data in Canada and uncertainty about tariffs have caused the Canadian dollar to continue to weaken. The Bank of Canada may have room to cut interest rates due to a weak economy and low inflationary pressures, which is negative for the Canadian dollar.
The Bank of Japan kept interest rates unchanged and inflation slowed: The Bank of Japan kept interest rates unchanged and inflation slowed, making it difficult for the yen to strengthen. The 200-day moving average of USD/JPY has become an important level to watch, as the yen currently struggles in the foreign exchange market.
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