China’s economy grew by 1.1% in the second quarter of 2025, slightly outpacing market expectations. This suggests that recent efforts to stabilize growth are beginning to show results. However, momentum remains fragile amid sluggish domestic demand, a continuing slump in real estate investment, and persistent external risks. Whether policymakers step up support will be a key factor in determining the economy’s trajectory going forward.
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The Bank of Japan may raise interest rates again in October, drawing renewed attention from global markets. A former chief economist noted that with reduced trade uncertainty and rising inflation, the likelihood of another rate hike has increased. Japan’s current interest rate sits at 0.5%, the highest level since 2008. A surge in core consumer prices, along with climbing rice and oil costs, is putting additional pressure on policymakers. Investors should closely watch the central bank’s meetings in July and October, as these will be pivotal in shaping the future direction of Japan’s interest rate strategy.
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Federal Reserve Chair Jerome Powell has stood firm on maintaining the central bank’s independence despite growing political pressure, emphasizing that any decision to cut interest rates will be driven by economic data—not the upcoming election cycle. With core inflation still running above the Fed’s target, market expectations now suggest a potential rate cut may not come until September at the earliest. Investors should closely watch how U.S. interest rate movements could impact Hong Kong dollar rates, the local property market, and cross-border capital flows.
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The euro has seen increased volatility against the US dollar recently, drawing attention to the key support level at 1.1670. With shifting policy dynamics and trade developments between the EU and the US, a short-term technical rebound is possible. Key resistance levels are now at 1.1765 and 1.1800. If Europe’s economic fundamentals remain stable, the euro could potentially test the 1.2000 mark by year-end. Forex traders should closely monitor central bank policies and market sentiment in both regions to stay ahead of currency market trends.
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The British pound is approaching a pivotal week, with markets closely watching the UK’s latest GDP, retail sales, and inflation reports. A cooling job market and weakening business confidence, coupled with a strengthening US dollar, have put short-term pressure on the pound. If upcoming economic data continues to disappoint, the Bank of England may be forced to consider cutting interest rates sooner than expected—heightening currency volatility. Investors should stay alert to market trends and central bank signals, and position themselves with caution.
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The euro rebounded against the U.S. dollar at the key technical support level of 1.1686, forming a bullish flag pattern—a signal that the upward trend could continue. A decisive break above 1.1805 may open the door for a move toward the 1.1965 resistance level. However, ongoing U.S.-EU tariff negotiations and upcoming U.S. economic data remain critical factors that could sway the market. Traders should keep a close eye on these developments.