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Hello everyone, today XM Forex will bring you "[XM Group]: A collection of good and bad news affecting the foreign exchange market". Hope this helps you! The original content is as follows:
On December 5, 2025, there was a mixture of long and short news in the foreign exchange market. The US dollar swung between expectations of interest rate cuts and short-term data support. European currencies were supported by the central bank's policy determination. The Japanese yen strengthened due to expectations of interest rate hikes, and the RMB rose simultaneously. The following summarizes the core good and bad news that affected the foreign exchange market that day to provide a reference for trading:
Good news: First, the U.S. dollar index initially stopped nine consecutive losses, rising slightly by 0.1% to 99.02 on December 4. On the 5th, the Asian market continued to fluctuate slightly, avoiding the extreme trend of unilateral decline. Second, the number of people applying for unemployment benefits for the first time in the United States fell to a more than three-year low last week. The strong employment data provided short-term support for the US dollar, which to some extent alleviated the market's concerns about the cooling of the US economy. Third, the differentiation of U.S. technology stocks has brought about a slight return of funds. The rise of Meta, Nvidia and other stocks has driven the Nasdaq to rise slightly, indirectly stabilizing the attractiveness of U.S. dollar assets.
Bad news: First, the Federal Reserve's interest rate cut is almost a foregone conclusion. The CME Group's FedWatch tool shows that the probability of a 25 basis point interest rate cut in December is close to 90%. White House Economic Council Director Hassett also made it clear that there is a high probability of an interest rate cut of this magnitude. Secondly, speculation that White House economic adviser Hassett may take over as chairman of the Federal Reserve continues to ferment. The market believes that his policy stance is dovish, which will push the Federal Reserve to accelerate the pace of easing and suppress the dollar in the long term. Third, the U.S. Treasury Department’s debt has exceeded the $30 trillion mark, and the problem of high debt has weakened the market’s confidence in the U.S. dollar.
Good news: On the one hand, many officials from the European Central BankOfficials issued a hawkish signal. President Lagarde said the current interest rate level was appropriate. Governing Council member Cassax believed it was too early to discuss interest rate cuts. Most officials recognized that the interest rate cut cycle was over, and policy determination supported the euro. On the other hand, the general rise in European stock markets sent positive economic signals. On December 5, the European Stoxx 600 index rose by 0.5%, and the German DAX index led the increase by 0.85%. The expectation of a moderate economic recovery is good for the euro and the pound. In addition, French President Macron confirmed that he will appoint a new prime minister, government bond prices have stabilized, and the yield gap with Germany's 10-year government bond has narrowed, providing a moderate boost to the euro.
Bad news: There are still hidden concerns about the economic growth of the Eurozone. Although the European Central Bank maintains interest rates stable, it also warns that there are two-way risks of inflation. Factors such as global trade policy instability and supply chain fragmentation may suppress economic recovery. At the same time, the euro fell 0.2% against the U.S. dollar to 1.1649 on December 4. The short-term rebound of the U.S. dollar caused a periodic suppression of European currencies, and the core inflation in the euro area is still higher than the 2% target, and the pressure on price stability has not yet been www.xmasseuse.completely relieved.
Good news: The Japanese yen has received clear positive news, and market expectations for the Bank of Japan to raise interest rates in December continue to heat up, pushing the Japanese yen to 155.015 against the US dollar, close to the strongest level since November 17. In terms of www.xmasseuse.commodity currencies, the Australian dollar and New Zealand dollar rose simultaneously against the renminbi, with the Australian dollar against the renminbi rising to 4.6586 and the New Zealand dollar against the renminbi regaining lost ground to 4.0715, benefiting from www.xmasseuse.commodity price fluctuations and the strengthening of the renminbi.
Bad news: Bank of Japan review member Nakamura Toyaki made dovish remarks, saying that he lacked confidence in the sustainability of wage growth and that inflation may be difficult to reach 2% after fiscal year 2025. This statement triggered market doubts about the implementation of interest rate hikes and restricted the growth of the yen. The Canadian dollar was affected by the increase in bets on interest rate cuts by the Bank of Canada. The U.S. dollar rose slightly against the Canadian dollar. Short-term fluctuations in www.xmasseuse.commodity prices also caused the Canadian dollar to lack the momentum to continue rising.
Good news: On December 5, the RMB strengthened across the board, the real-time trading price of USD/CNY was reported at 7.0670, and the inter-bank central parity rate increased 21 points from the previous trading day. At the same time, the RMB has shown an upward trend against many currencies such as the euro and the pound. The pound has surged 778 points against the RMB, providing benefits for cross-border trade and investment.
Bad news: The offshore RMB fell 139 points against the US dollar the day before, and short-term fluctuations in the external foreign exchange market may be transmitted to the onshore market. In addition, global trade protectionist measures still exist, which may indirectly cause slight disturbances to the RMB exchange rate by affecting China's import and export trade.
The above content is all about "[XM Group]: Collection of good and bad news affecting the foreign exchange market". It is carefully www.xmasseuse.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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