20 19 has the greatest impact on the global foreign exchange market: Britain's withdrawal from the EU, the Sino-US trade dispute and the Federal Reserve's interest rate cut. Among them, the impact of the Fed's interest rate cut is undoubtedly all-round and extremely huge, and it can even be said that it is the beginning of the era of global central bank easing.

What is the impact of the Fed's interest rate cut on foreign exchange?

Theoretically, the impact of the Fed's interest rate cut on foreign exchange is favorable. After the Fed cuts interest rates, the cost of using dollars will be reduced. As the US dollar is an internationally used reserve currency, it is freely convertible. Therefore, without interest rate cuts, more US dollars will be converted into convertible currencies or commodities, and everyone will sell US dollars, which will lead to the depreciation of the US dollar. The interest rate cut by the Federal Reserve led to a lower exchange rate of the US dollar, which depreciated against other currencies and appreciated against other currencies. After the Federal Reserve cut interest rates, major currencies rose against the euro and the pound.

The impact of the Fed's interest rate cut on the foreign exchange market depends on the response of central banks around the world. After that, many countries and regions cut interest rates to alleviate the appreciation pressure brought by the Fed's RRR cut. Other countries, such as China, are not greatly affected by economic stability.