ForexLive Asia FX news wrap: China moves the forex again
Forex and Bitcoin news for Asia trading Friday 17 August 2018
- More on what's coming up from Fed Chair Powell at Jackson Hole
- So far in 2018 China has drained more than a trillion yuan via OMOs
- PBOC sets USD/ CNY reference rate for today at 6.8894(vs. yesterday at 6.8946)
- ANZ on the AUD - it "lacks a catalyst for a sustained move higher"
- TD now expects the RBNZ to hike in November 2019 (previously were at May 2019)
- Singapore July data: NODX +4.3% m/m and +11.8% y/y
- RBA Lowe says a lower Australian dollar would be helpful
- RBA's Lowe remarking on the US - public finances problematic
- RBA Low speaking now - expects next move in rates to be up
- Reuters Japan Tankan shows manufacturers most confident in 7 months
- NZ data, Q2 PPI Outputs +0.9% q/q (prior 0.2%) and Inputs +1.0% q/q (prior 0.6%)
- Japan PM Abe may be in the market for 10bn USD
- WSJ: US Signals It Could Sanction China Over Iran Oil Imports
- Trade ideas thread - Friday 17 August 2018
- BoA ML say USD is poised for another leg higher ("shifting dynamics of FX carry")
The People's Bank of China added a little strength to the onshore yuan today (reference rate set at 6.8896) after 6 days of devaluation. There was a range of expectations for the central rate, those I had seen were on a mid to high 6.9 figure (after 6.8946 Thursday). The market response (not huge, but noticeable nonetheless) of a quick gain for the AUD (for example) was indicative it caught a few by surprise. I don't want to read too much into the set today, but it was perceived as a further slight easing in US /China tensions following the announcement of the low-level taks to take place later in July on trade just yesterday. Let's see how that plays out (my hopes are not high), but it was enough for a pop in risk.
AUD, as already mentioned, and elsewhere on the forex: EUR, NZD, CAD, even GBP. Regional shares also added a little.
Apart from that moves were subdued, as was news and data.
We got a three hour testimony by RBA Gov Lowe and other officials in parliament. The market paid the central banks a compliment by pretty much ignoring their familiar comments and leaving AUD barely changed (the pop came on the PBOC as explained above).
As I update the offshore yuan is weakening again …
- For the forex option people - heads up for expiries early next week
- FX expiries for Friday 17 August 2018 at the 10am NY cut